Philippine Rice shortage artificial or real?
The BAS (Bureau of Agriculture Statistics) had a bright outlook and their data shows increased in rice production and land use in their 2005 to 2007 data with another round of increase output, rightly so with all the billions poured into "food self-sufficiency," so why are we importing? Billions spent and all of a sudden the Philippines becomes the biggest rice exporter? The rosy picture was basically debunked by KMP using the government agencies memorandum which I have extensively quoted in this article.
If you listen to the opportunist errr opposition like Senator Edgardo Angara he says the present rice crisis was “artificial” and was caused by hoarders and unscrupulous traders.
Philippine Daily Inquirer reports from the provinces indicated that rice hoarders were in collusion with some managers of National Food Authority (NFA) warehouses, diverting tens of thousands of bags of cheap rice which were re-bagged and sold at higher commercial prices.
Angara said the country was actually facing “a rice distribution crisis” and that the panic was being fanned by the hoarders themselves who anticipate a rise in prices.
The National Food Authority (NFA) and the Department of Agriculture (DA) themselves know that we are facing a rice crisis. The main cause of this crisis is the backward and feudal state of agriculture in the country and is worsened by neo-liberal policies of the Macapagal-Arroyo regime and trade liberalization that has drastically cut rice lands through land-use conversions and crop conversions. Now this was further aggravated by the rice cartel by their control of the rice industry and their hoarding practices today.
- PAGASA forecast, that the country will still experience abnormal weather conditions until the end of the 1st quarter this year. Above normal rainfall will prevail over most of Luzon and the Visayas with near normal to above normal in Mindanao areas;
- Neutral conditions will most likely occur during the second half of the year. Around two (2) - five (5) tropical cyclones are expected to enter Philippine Area of Responsibility (PAR) until June this year. The abnormal weather conditions will more likely result to stress the standing palay crop, more especially during its booting stage which would result to low yields;
- Total palay production for Calendar Year 2007 is recorded at 16.237 TMT, almost 6% above the output attained in 2006 at 15.327 TMT, due mainly to area expansion by 2.70% and the improvement in yield by 3.16%. for the 1st semester of 2008, the January 1, 2008 production forecast of BAS for the 1st semester of this year (January to June) would reach 7,154 TMT, 6.33% higher than the 2007 level because of the foreseen increase in area planted and yield;
- the registered growth in palay production is not enough to meet the combined effect of an increase in demand and the need to maintain the required buffer stock by July 1, the start of the traditional lean supply months of July to September of each year. For 2008 per capita consumption of rice is estimated to increase by 2 kilos from 118-120 kilos per capita per year. Rice supply-use estimates for crop year 2007-08 considering three (3) scenario (high, medium, low) showed that despite projected gains in productivity, the country will still require an import level of 1.6 to 2.2 MMT, to fully meet demand and buffer stock requirement good for 90-day by end of June 30, this year;
- The reported tight global rice situation has been lately reported to worsen with the reported purchase of 1.0 MMT milled rice by China from Vietnam . Further, Vietnam was reported to have already suspended its rice export activities for 2008 due to limited supply. Also Vietnam wrote DA they will only assure 1 MMT rice exports to the Philippines ;
- World market price of rice remains volatile, increasing at significant levels. The latest report from the International Surveillance & Consultancy Co. Ltd (ISC) at US$ 440/MT, FOB showed that as of February this year , FOB prices of 25% BKN rice is 52% higher than their levels the same period last year of US$ 289/MT, FOB. Further, the report from ISC indicated that to comply with NFA's specs , the ISC quoted price will have to be adjusted upward by US$ 6.7/MT. The NFA last December 21, 2007 purchased 422, 702 MT of 25% BKN rice at an average price of US$ 409.52/MT, CFR. The following month, January 29, 2008, the NFA again purchased 454,000 MT of the same quality rice at an average price of US$ 474.41/MT, CFR, significantly higher by 16% from the December purchases;
- To date NFA has procured a total of only 1,658 MT palay (1,077 MT in rice equivalent) or 88% less than the volume procured same month last year. Prevailing ex-farm price of palay in major palay producing areas in Luzon (region 2, 3, 4 & 5) ranged from a low of P11.00/kg (Isabela & Quirino) to a high of P14.50 in Nueva Ecija. In the Visayas, prices averaged at P11.50-P12.00/ kg while in Mindanao , prices were higher at P11.00-P14.00/ kg.
Citing further DA’s (Department of Agriculture) memo dated February 27, 2008 that highlighted the world rice crisis and its price, as follows:
- In Thailand , palay harvest will be on March –April but the volume is only very limited estimated at 6MMT (roughly 30% of their annual production) since their main harvest will still be on November where harvest is estimated at 20 MMT. Ex-farm price of paddy is 9,500 bath/MT or P12.25/kg. Bulk of their palay inventory is still in the hands of the farmers as they are waiting for higher prices. Around 1.6 MMT parboiled rice is exported yearly to Europe and Africa but this year they are expecting this to significantly increase. Price of rice brokens shipped by Thailand to Africa is $430/ MT FOB. Also, Thailand has initially sold 60,000 MT to Iraq and may sell more rice to Iraq. The Thai government is still holding around 1.5 MMT two-year old rice but the new government is still adamant to touch the volume;
- Vietnam will still assess their targeted 4.5 MMT palay harvest. Part of Vietnam and China were hit by snow affecting their projected palay harvest. They now imposed volume limitations on their rice exports.
- In Indonesia , palay harvest will still be on April-June and price of rice is at 4,000 Rupiah per kilogram or US$0.45. Estimated annual production of Indonesia is 50 MMT and import volume will still be determined by July – August.
- World rice prices are expected to continue its upward trend despite the palay harvest starting next month. This is due to the aggressive stance of some governments rushing to build up their inventories and pests damaging rice crops in the Delta Province in Vietnam. The steady population growth in the Middle East and Africa is also boosting demand for rice. In sum rice is now a sellers market.
It is crystal clear that there is an actual crisis that is why Malacañang is trying to increase our rice stock through importation. The rice cartel or the Binondo 7 knows this and that is the reason why they are hoarding and increasing their prices. Now, importing more rice from other countries will only make matters worse because there is no more rice supply in the world market available for export and second a food security program based on imports is not food security at all. It will only make us more dependent to other countries and hold our food security hostage to other interests. What we need now are immediate rice price controls and at least a 25% increase in the local procurement of rice of the NFA, so that the cartel cannot get their hands on the April-June harvest. These are our only chance to stave off the rice crisis until we implement genuine agrarian reform, so that this will not happen again.
The specter of Malthus is very real in the context of Philippine condition with 68 million people earning less than US$2 a day. While Malthus population model is debunked in industrialized nations Gloria Arroyo & the TraPos marginalization of Filipinos are succeeding in validating Darwin’s realization on its applicability to the animal kingdom. Darwin recognizes the animals’ lack of capacity to volitionally control reproductive rates, wherein the predominantly Roman Catholic population contributed to the exponential growth of Philippine population. Like voiceless animals without access to birth control medicine has to offer has turned poor Filipinos like rabbits to the tune of 90 million baby machine. In effect 1.9 million families are reduced to animal level survival suffering similar cycles of periodic famines with more to come as soon as the world food crises are felt in the coming months.
Corruption and mismanagement is taking its toll using land reform as a leverage for their patronage politics exacerbated by the likes of Joc Joc Bolante’s fertilizer scam we are now faced with a compounded problem where no easy solution is on hand when political leaders with their greedy profiteer partners combined to further steal whatever there is to steal.
So who are these Binondo 7? Is this the reason why there are so many conflicting accounts of the crisis as to whether it is real or not, imagined or not?
In one of the yahoo groups there is one particular and "interesting" fund that was pointed out by Napoleon Cabello of Manila Bulletin:
To make our farmers competitive amid the the challenges of globalization, there issupposed to be an ACEF fund out of tariffs of farm imports which has now accumulatged to some P10.5 billion since the creation of the law in1996. My quick reading shows this is barely utilized!! Why? I really don't know.
Instead of ensuring food security through genuine land reform and higher agricultural production that serve the local needs, Ms Arroyo and her ilk aggressively promoted the importation of rice and other agricultural products—to the prejudice of local Filipino farmers. Worse, the country's agricultural lands have been converted to golf courses, subdivisions and export crops plantations—again to the prejudice of local Filipino farmers. Needless to say, it is not only the farmers who are suffering the consequences of Ms Arroyo's bankrupt economic policies. So does each and every Filipino whose rights to food security have been long neglected.
So where are we headed with all the problems that we are facing..... failure of leadership and the specter of famine is very real for the 1.9 million Filipino Families......
Related article:
Rice Shortage & Prison Idol Gloria Arroyo
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