Rice is the dominant staple crop in developing countries, particularly in the humid tropics across the globe. According to UN statistics, almost 90 percent of rice is produced and consumed in Asia, and 96 percent in developing countries.
Rice production in most countries has increased faster than population over the last three decades, despite being produced on small and marginal and tenant farms in countries with extreme population pressure on limited land resources. Most of the growth in production originated from technological progress in the irrigated and the favorable rain-fed ecosystems.
In many parts of the world, the growth in rice consumption has started slowing down because of urbanization, increases in per capita income leading to diversification of the diet, high levels of rice consumption already reached in many countries, and progress in reducing population growth. But, the growth in rice supply has also slowed down because of the yield approaching economic optimum for the irrigated ecosystem, decline in relative profitability of rice cultivation, increasing concerns regarding environmental protection, and limited progress in developing improved technologies for the unfavorable ecosystems.
The UN says two contrasting developments may substantially affect the rice economy in the future. First, the prosperous rice-growing countries may increasingly find it difficult to sustain producers' interest in rice farming. The move towards free trade in agricultural production will affect the sustainability of rice farming in these countries. There will be economic incentives for the movement of land, water and labor out of rice to other economic activities. Second, the potential for increased productivity for the irrigated ecosystem, created by the dramatic technological breakthrough in genetic enhancement of seeds that initiated the Green Revolution has almost been exploited while improved varieties for the unfavorable ecosystems expected from the on-going gene revolution are still on the horizon.

Last year 7.2 million tons of rice were harvested from 620,000 hectares of paddy fields.

The growth in demand for rice will slow down substantially with economic growth and success in population control, particularly in the middle and high-income countries. But, the growth in production may also slow down because of the growing scarcity of land, labor, and water. The world rice market will continue to remain segmented because of the overwhelming importance of rice as a staple food and its political and cultural significance. Large rice-consuming countries will continue to protect rice producers' and consumers' welfare through inward-looking policies.
The trend in price in the world market will be determined by the relative value of the currency of the major rice exporters and the long-term change in the unit cost of production from technological progress.

Bottlenecks
Many experts warn that high cost of rice cultivation in Iran compared to the world average standard is an impediment to the country's accession to the World Trade Organization, the Persian daily Jahan-e-eqtesad says in an article.
Subsequently, mechanized rice farming, lesser waste of the crop, optimal water consumption and improvement of paddy fields are the prerequisites to WTO accession.
Last year (2003-04), the government said Iran's rice harvest from 620,000 hectares of paddy fields stood at 2,200,000 tons.
Iran ranks 23rd in terms of rice production and 26th in terms of the areas under the crop's cultivation. Iran is among the top 10 states for average rice output but the country is now suffering from about 400,000 tons of rice shortage, which is met from other states.
Self-sufficiency in rice production will be the next step for the policy-makers of the Ministry of Agriculture Jihad, after achieving the goal in wheat production.
Self-sufficiency in rice production would prevent the flow of some 600,000 tons of the produce towards the country per annum.
The government is also seeking to achieve self-sufficiency in maize, sugar and oil seeds in a ten-year plan.

Iran needs to import 300,000 tons of rice this year (ending March 20, 2005).

Stable Diet
As mentioned, rice is Iranians' staple food and the main production area for the grain is located in northern parts of Iran.
Head of the Board of Directors and Managing Director of Iran's Rice Protection Association Jamil Alizadeh Shayeq said a few months ago that Iran needs to import 300,000 tons of rice this year (ending March 20, 2005).
Shayeq said 2,200,000 tons of rice would be produced in the county this year and only 300,000 tons of imports would be enough to meet the annual domestic demand, which is expected to be 2.5 million tons.
He added that about 230,000 hectares of land are under top quality rice cultivation this year, and are expected to yield about one million tons of fine quality rice as in the past year.

Ambitious Plan
Acting deputy head of the Ministry of Agriculture Jihad for Cultivation Affairs Delavar Heydarpour says Iran's rice demand stands near 2.5 million tons annually, adding once domestic rice production increases by almost 500,000 tons, the country would be on the verge of self-sufficiency.
"Out of 2.5 million tons consumed in the country, nearly 400,000 tons are imported," he says, noting that in order to overcome imports, the government is working on strategies to achieve self-sufficiency by ways such as using high-quality seed and fertilizers as well as employment of advanced machinery.
Pointing to the high per capita rice consumption, the official says in the past two decades rice consumption and production have risen in tandem, increasing from 25 kilograms in the last decade to 40 kilograms in the present decade. "Therefore, the main focus of the state's self-sufficiency plan will be to alter consumption patterns for good and in accordance with nutritive standards."
Pointing out that the fourth economic development plan (2005-2010) is on achieving self-sufficiency in rice production, he said the issue is a priority at his ministry after the successful wheat self-sufficiency scheme.
Any such plan, he says, will focus on not only increasing performance per land surface instead of expanding rice farms, but also maintaining the quality of the product as well.
"It is estimated that after completion of the plan (which will take ten years), rice production will increase from 5 tons of paddy per hectare to 6.5 tons, a prerequisite which requires full coordination among relevant bodies."
An important point to be taken into consideration, says the official, is that support for domestic production should not mean imposing extra costs on consumers. "Equally, consumer benefits should not be given priority over producer demands and needs."
"In fact, just as state should support consumers through subsidies, it should also render incentives for farmers who are among the most vulnerable strata. To this end, we have proposed subsidies not in cash but in the form of plans to improve infrastructures such as establishing adequate water supply networks, ... etc."
On smuggling, Heydarpour said no exact and reliable figures exist as to rice smuggling.

Self-Reliant
Iran is one of the world's major rice producers, grown in different regions. One such is the Caspian province of Gilan in the north.
The landscape in semi-tropical Gilan is lush and green - hardly the image one usually associates with drought. But even here the drought is having its effect.
Many families, who own three hectares of land, usually produce two-and-a-half tons of rice a year. The rice industry is perhaps the biggest employer in Iran.
For rice growers, rice is their only cash crop. The rest of their tiny farms feed the family.
They breed chickens, grow pomegranate, orange and tangerine and also quince trees and produce their own milk.
Most farmers says they have for the past two years been more self-reliant than ever. The harvest has fallen by a third because of the poor spring rains. Most have just about managed to make good the loss by digging into their small savings.
These people have grown rice all their life.
One farmer said: "We plant the seeds and when they become green seedlings we transplant the plants and water them. They need water all the time."
"When they are ripe, we harvest the crop and take the rice into town, where we sell it."

Water in demand
When the harvest is poor, the government imports rice from Vietnam and Thailand and the market price drops. Iranian rice farms depend completely on cultivation techniques many centuries old and it is impossible to compete.
At the Rice Research Institute in Gilan, irrigation engineer Rezaie believes it is essential to look at the wider picture if the rice farmers are to sustain production.
"The water problem all over the world is because of a population problem," he said. "It's a scientific fact."
Many families in Gilan and their ancestors have farmed this land for centuries. They have seen lean times before and many cycles of drought. Almost none of the rice farmers of Gilan have given up and moved to the city for work.
"We're proud of our land," he said. "All we want is to be able to make a living and hand it on to our children."

Moves to implement the right policy in relation to lowering the bank profit rate should be coordinated by the government with the Council of Money and Credit.
The government and the Majlis have agreed on lowering the bank profit rate. In the past three years, the government has lowered the rate by one percent on an average.
However, it does not make sense for the Majlis to interfere in setting the bank profit rate, as the issue transcends its scope of duties. It would be more logical to allow the rate to be determined in the Council of Money and Credit, which also comprises of parliamentarians.
The point is that determining the bank profit rate is a complicated issue requiring experts' outlook. It is thus obvious that if other parameters such as the profit rate in the black market are ignored, the banking system will become more inefficient.
The government must consider economic laws and dynamics to make the national economy more competitive. Policies such as privatization of banks could be effective, but unilateral measures by the Majlis can further aggravate the economic situation.
In the meantime, it must be understood that private banks offer higher profit rate than state-run banks because they have more freedom in carrying out their operations. Private banks have been given more leeway to facilitate their growth. This is while state-run banks face restrictions through rules and regulations and risk factors.
But since private banks use private capital they face lower investment risks while charging higher profits for their services. Of course people are increasingly turning to private bank facilities from state-run banks.
Privatization can improve not only the banking system it can also help upgrade other economic sectors. Nevertheless, a healthy and efficient banking system is the prerequisite for economic growth in the long run.
If a logical method were devised to set the profit rate in compliance with domestic needs and demands, the position of banks would be far better.
This would necessitate that the Majlis refrain from interfering in this important task, which would best be undertaken by experts of the Council of Money and Credit.