Rising wages for agricultural workers in parts of Asia have brought about the "end of cheap rice", according to a new report, a potential humanitarian disaster for impoverished parts of the world where many people rely on the staple food to survive - unless African farmers step up production.

The report by the Overseas Development Institute (ODI) thinktank calls for social safety net policies in states where populations would suffer dire consequences from rice price shocks.

However, it also says rice's rising price - which has soared by 120% in real terms since 2000 - could ignite African farmers' potential and will improve the lives of those better-paid Asian workers.

"This report should cause people to sit up and take note. The drift towards higher prices for one of the world's basic food staples has far-reaching implications," said ODI Director Kevin Watkins.

"Millions of agricultural labourers stand to gain from higher wages, with potentially huge benefits for poverty reduction. But many poor households will also face higher food bills - and countries in Africa will face higher food import costs."

As well as higher wages driving up production costs, rising fuel and fertiliser bills have also added to the market price of rice. Stockpiling of rice by governments has removed a significant portion of the supply from the market, pushing the price up further.

African Farming Potential

The ODI said two groups of people will be most significantly affected by higher rice prices. The first is people in poorer parts of Asia that have not benefited from the rising wages linked to rice production. The second is African consumers who rely on cheap imported Asian rice in their diets.

"Adjustments will take place," said the ODI report. "The Asian poor may migrate to areas where there are better paid jobs. West Africans on low incomes may switch to consumption of locally-produced alternatives, such as cassava, yam, millet and sorghum.

"Such a switch in demand would give added stimulus to African farmers to produce more for their domestic markets more for their domestic markets. It would also encourage attempts to raised rice production in West Africa, assisted by the release of higher-yielding Nerica varieties.

"If the end of cheap rice from Asia helps West Africa to fulfil its undoubted potential in rice production, that will be no bad thing in the long run."

It is not just swelling local demand that could bolster African farmers, but also lower production in Asia as countries such as China shift towards a consideration for the environment and move away from intensive farming.

This leaves the door open to African farmers to plug the supply gap left by lower Asian productivity and export rice across the world, as well as meet local needs.

Asian rural wage growth

While the ODI says the cause of wage growth for some Asian rural workers is yet to be confirmed, it may be down to a diminishing supply of agricultural labour "as urbanisation and the growth of manufacturing industry create jobs and tempt rural workers away from the land."

"For centuries across Asia, rising populations have meant that there has been a reserve army of labour in rural areas that would work for low wages," said the report.

"Urbanisation and industrial growth, however, are beginning to provide alternatives to low-paid farm work. Farmers who need to hire help have to pay more if they are to get the labour they need.

"Cheap rice may have ended, but perhaps more importantly, so too have poverty wages on the land - at least in some parts of Asia. This calls for celebration."