Domestic demand would be capable of absorbing the increased rice surplus without an appreciable decline in price. An analysis of the proposal to support rice prices through procurement of domestic production shows that even massive increases of domestic procurement would result in very small price increases, while at the same time causing serious storage-capacity and budgetary problems for the government. The prospects for exporting rice are more interesting. Even though rice traded internationally is only a small share of world production, and international prices are very volatile, the major exporters have been able to improve their share of world exports. In the 1980s, Bangladesh showed a growth in rice production that was superior even to the top five world exporters, and high qualities of Bangladeshi rice have a comparative advantage over various comparable varieties of rice produced domestically and internationally.
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