Thailand's+rice+bowl+may+get+smaller+as+government+spurs+curbs+in+planting+-+Caroline

Title of Article: Thailand’s rice bowl may get smaller as government spurs curbs in planting. Source: [] Date: April 8, 2011 Explanation: Thailand is the key producer of rice since it is a country that can always keep up with the global prices with its plentiful stockpiles. This year, corn and wheat prices increased, so Thailand rice planters are struggling because of the decrease in price of rice. Because of this struggle, the Thai government is planning to change the production of the rice growers since production costs are higher than income, and they cannot afford to continue planting. The new plan is to cut a third planting of rice this year, which will reduce the annual exports by 20%. The people who benefit from the decrease in production of rice are the rice planters, since price will rise and they will earn more income. In contrast, poor consumers in Africa and elsewhere may be affected since they won’t be able to afford the new price of rice. The market of rice produced in Thailand before government intervention is displayed in Figure 1. As you can see, the market is a normal supply and demand curve.

Figure 1:

In figure 2, the market of wheat and corn, after its price is increased, is shown.

Figure 2:

The market of rice after it was affected by the price of the wheat and corn is shown in figure 3. The dot on the demand curve moves along the line because price is the object that is affecting the market of rice.

Figure 3:



The next graph in figure 4 shows the market of rice after government interventions. After the Thai government reduces the supply of rice, the price of rice increases.

Figure 4:



Vocab List:

Demand: the desire of consumers for a particular service or commodity Supply: the amount of a good or service offered for sale Quantity Demanded: the amount of a product people are willing to buy at a certain price. Quantity Supplied: amount of a product producers are willing to supply at a certain price. Law of Demand: states that as price increases, demand decreases. Law of Supply: states that as price increases, supply increases. Inflation: a general increase in prices and fall in the purchasing value of money Income: money received for work or through investment Shortages: a state in which something needed cannot be obtained in sufficient amounts

Evaluation:

I do not completely, but agree with the government’s action of decreasing supply of rice in Thailand to help improve the economy of rice because the decrease in supply will increase the price of rice thus will improve the income of rice planters and motivate them to make more rice. Also, the increase in price of rice will improve the economy of Thailand as well since more money is being collected. Consumers will continue on buying rice at a constant rate since it is a part of everyday eating for many Asian families. The only part that I am against of with Thai’s government actions is it’s effects towards poor countries. Poor countries rely their food on the cheapest crops, and at that state, rice has been the cheapest crop. The increase in the price of rice will therefore affect the lives of poor consumers.