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By Nora O. Gamolo, Senior Desk
Editor
Farmers accuse the Arroyo
administration of having deliberately ignored signs of economic
danger posed by a looming rice crisis.
Other critics do not say there
was deliberate inattention. But they still blame the Palace for
failing to manage the foreseen and imminent rice crisis because it
had to fight for political survival amid Senate investigations,
rebellious military plots and rallies calling for President Arroyo
to resign.
The militant Kilusang Magbubukid
ng Pilipinas (KMP) claims that Malacañang knew all along that the
rice crisis is imminent, but the demands of political survival
impelled it to be in denial and play a charade about the rice crisis
being manageable.
Two internal government documents
from the National Food Authority (NFA) and the Department of
Agriculture (DA) have actually provided the signals that pinpointed
danger, but Malacañang chose to ignore them, said the KMP.
The rice crisis is created by the
cause and effects of local and international economic movements,
some resulting from free-market forces, others from manipulation and
unintended consequences, said KMP.
The NFA memo is titled Update on
the Rice Situation and Outlook for 2008 and Request for Authority to
Import Additional 500,000 MT of Rice and the Corresponding Budget
Support for 2008. It has a February 11 date and the signature of
Jessup P. Navarro, NFA administrator. It is addressed to Agriculture
Secretary Arthur Yap, chairman of the NFA Council.
The DA memo, dated February 27,
is from Secretary Yap to Mrs. Arroyo, entitled World Rice Situation
and Expectations for 2008.
Rep. Rafael Mariano, president of
Anakpawis party-list and KMP chairman, told The Times, “these
memos outline the reasons for the impending rice crisis” but the
government has only offered “band-aid solutions.” (He said this
before President Arroyo announced, at the Food Summit in Clark last
Friday, the launching of new agricultural programs costing more than
P40 billion.)
Abnormal weather
In the NFA memorandum, the Pagasa
forecasts of abnormally bad weather conditions until June were
discussed. These abnormal conditions were seen to stress the
standing palay crop, more especially during its booting stage,
resulting in lower yields.
Total palay production for 2007
was recorded at 16.237 MT, almost 6 percent higher than the 2006
output at 15.327 MT, due mainly to the expansion of areas planted to
rice by 2.70 percent and the improvement in yield by 3.16 percent
for the first semester.
Meanwhile, the January 1
production forecast of the Bureau of Agricultural Statistics for
January to June 2008 says yielf would reach 7,154 MT, 6.33 percent
higher than the 2007 level because of the foreseen increase in area
planted and yields.
However, the registered growth in
palay production is not enough to meet increased demand and the need
to maintain the required buffer stock by July 1, the start of the
lean supply months of July to September. For 2008, the per capita
consumption of rice is estimated to increase by two kilos from 118
to 120 kilos per capita per year.
Rice supply-use estimates for
crop year 2007-2008 that consider three scenarios (high, medium, low
demand) showed that despite projected gains in productivity, the
country will still require an import level of 1.6 to 2.2 million
metric tons (MMT), to fully meet the demand and buffer stock
requirement (90-days’ supply up to by end of June).
International crisis
The government also failed to
notice the signals from other rice-consuming countries communicating
their own foreseen rice crisis.
In a recent Cabinet meeting,
Agriculture Secretary Arthur Yap showed data from the US Department
of Agriculture proving that the world’s rice inventories now stand
at about 72 million tons, a record-low representing just 17 percent
of global demand when just eight years ago, stockpiles were equal to
35 percent of annual global consumption.
Yap pointed to a World Bank study
showing that food prices have increased by about 75 percent since
2000, and to a United Nations Food and Agriculture Organization
report that 36 countries—nine in Asia, two in Europe, 21 in
Africa, and four in Latin America—now require external assistance
to cope with worsening food supply problems.
However, he also said that
“Fortunately, the Philippines is not included in this critical
list.”
The reported tight global rice
situation was aggravated by the reported purchase of 1.0 MMT milled
rice by overheating big buyer China from Vietnam, which was reported
to have already suspended its rice export activities for 2008 due to
limited supply.
Vietnam has allegedly written the
DA it can only assure 1 MMT rice exports to the Philippines,
although the accord it lately signed with the Philippines assured
the country of some 1.5 MMT spread over three years.
World market price of rice
remains volatile, increasing at significant levels. The latest
report from the trading monitor International Surveillance &
Consultancy (ISC) Co. Ltd. at $440/MT, FOB showed that as of
February, FOB prices of 25 percent BKN rice is 52 percent higher
than their levels for the same period last year, $289/MT, FOB.
By end-March, NFA has
procured a total of only 1,658 MT of palay (equivalent only to 1,077
MT in rice), of 88 percent less than the volume procured same month
last year.
Prevailing ex-farm price of palay
in major palay-producing areas in Luzon (Cagayan Valley, Central
Luzon, Southern Luzon and Bicol Region) ranged from a low of P11/kg
(Isabela & Quirino) to a high of P14.50 in Nueva Ecija.
In the Visayas, prices averaged
at P11.50 to P12/kg while in Mindanao, prices were higher at P11 to
P14/kg, said Mariano. Palay prices are higher in Mindanao since much
of its agricultural land has been gobbled up by agribusiness farms
producing not palay, but other cash crops like bananas, palm oil,
and pineapples.
Meanwhile, the DA memo
highlighted the world rice crisis because traditional sources are
experiencing bad weather due to climate change and traditional
importers of rice are aggressively building up their buffer stock to
insure that their populations don’t suffer.
“Rice is now a sellers
market,” added Mariano, stressing it has become a precious
commodity that will only go to the highest bidder.
Rice cartel control
“The simple reason for rice
price increases is that supply is low, while demand is high in the
world market. It also does not help that the Philippines is a net
rice importer and that the rice industry here is controlled by the
rice cartel or the Binondo 7,” said Mariano.
What the country needs is not
more rice importation that breeds dependency, but long-term
solutions that will restructure the country’s overall agricultural
system.
Among others, Mariano urges land
use and crop conversions to stop, deals that give land rights to
foreigners to be scrapped, the rice cartel to be demolished,
government support for increased rice production by natural means
and not through genetically modified varieties that demand heavy
cash and material inputs, and the implementation of genuine agrarian
reform that gives power to farmers and not to traders and
entrepreneurs.
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