Evidence suggests that rice was first cultivated in China around 12,000 years ago. According to excavations in the Yangtze River basin, pottery fragments with rice residue suggested the grain was grown and stored by some of the earliest civilizations.
Today, it’s still grown in more than 100 countries and is one of the most widely consumed grains in the world, used for everything from food sources to producing biodegradable plastic products and fuels.
This popularity and elastic use case has driven the demand for rice to unprecedented levels. According to the Food and Agriculture Organization, global rice production reached 768.54 million metric tons in 2020, with its demand increasing due to population growth, economic development, and dietary changes.
Current data reveals that over the five years from 2013–2018, rice production increased about 3% while the population increased by just over 6% in the same time frame. Considering the global population is projected to increase by over 25% in the next 27 years, reaching 9.9 billion by 2050, the world may be headed for a rice shortage in the near future.
This increasing demand has created a challenge for rice exporters, as international movement away from the United States dollar has resulted in the cessation of currency acceptance for some import destinations. These factors, together with the rate of soil depletion, are creating a crisis for both rice and the cost of living for the majority of people around the world.
Rice Production
The demand for rice is as old as civilization itself. It’s currently estimated that rice accounts for close to 20% of the entire world’s total calorie intake. This is largely due to its versatility and tolerance of varying growing conditions.
However, rice production continues to become more difficult, even as demand for the grain continues to expand. Soil depletion (the decline in soil fertility and nutrient content, often due to agricultural practices or environmental factors) is having a profound effect on agricultural productivity levels, and rice is no exception. Between 2001 and 2010, rice yield growth rates declined from 2.2% to 1.1% annually in the Southeast Asian region, largely due to soil depletion.
“By 2030, the production of Rice needs to grow by 50% to meet the population growth, and as this crop is so easily affected by climate instability, more research needs to be carried out to maintain this in coming years.”
The combination of expanding demand, decreasing supply, and exporting complications caused by some markets moving away from the United States dollar standard suggest rising prices of rice are on the horizon.
As the global population continues to rise, the demand for sustainable resources has become a critical issue. Rice, an essential food staple, plays a significant role in addressing these demands by expanding its applications beyond traditional food sources. Notably, rice byproducts — such as bran, husks, straw, and plant residues — have been instrumental in enhancing the agricultural and environmental sectors. The versatility of rice has resulted in its use as animal feed for livestock, poultry, and fish, as a bioenergy source through biomass power generation and advanced biofuel production, and as an organic fertilizer for nourishing soil.
Moreover, rice contributes to eco-friendly, biodegradable packaging materials, water purification, and insulation in building construction, all of which promote sustainability. Driven by the need to mitigate global resource challenges, the innovative applications of rice underscore its importance in the quest for more sustainable alternatives in various industries.
Value and Cost of Rice
While the rising price of grains like rice stands to benefit savvy investors with responsibly diversified investments in their portfolios, it is paramount that the conditions stimulating rising prices not be sustained. The lagging pace of production must be brought up to speed if a worldwide hunger crisis is to be averted.
Despite the inevitability of tomorrow’s problems, higher rice prices present a clear and present danger to destitute populations around the world that rely on this agricultural staple to survive. With basic food resources like rice becoming insurmountably expensive, entire cultures are at risk of extinction as their members face the unthinkable dilemma of abandoning their heritage to integrate into modernized society or perishing because they simply cannot afford to purchase food.
As a complete solution to this growing problem, LandX stands to benefit all parties involved in its production, trade, and consumption.
The LandX Effect
The most effective solution to these problems takes the form of access to financing that allows farmers to bring their operations into the 21st century.
Access to financing allows farmers to bring their operations into the 21st century.
Access to modern equipment. Facing a growing global food demand, farmers must urgently adopt modern practices. Technologies like precision agriculture increase crop yields by 5% to 15% (Source: ASABE), while drip irrigation systems boost yields by 20% to 90%(Source: FAO). Implementing these vital advancements is critical for food security and meeting the needs of an expanding population.
Investors seeking exposure to commodities play an inadvertently vital role in uplifting impoverished smallholder farmers. By allocating funds used for agricultural loans, these investors supply the necessary capital for small-scale farmers. The loans LandX make possible enable farmers to invest in modern technologies like those listed above, and in turn, enhance their productivity and quality of life. Although often driven exclusively by profit, investors ultimately facilitate a valuable service by empowering smallholder farmers and strengthening global food security.
More about LandX:
LandX perpetual vaults provide investors inflation hedged returns backed by a legal contract secured on underlying farmland. LandX makes perpetual vaults available as a liquid digital asset — xToken, offering investors uncorrelated, inflation-hedged diversification.
To find out more about how LandX is working to build a healthy economy for corn and other agricultural products visit: www.landx.fi/
