Rice sufficiency in danger; prices reach five-year high


080913_rice05Domestic rice prices reached a five-year high last month and are expected to surge even higher after Typhoon Santi ravaged most of Central Luzon’s harvestable rice lands.

However, the Department of Agriculture (DA) is expected to go through a full week to “finalize” its recommendations on the country’s rice situation, laying credence to observations of the agency’s “inherently bureaucratic process in decision-making.”

DA Secretary Proceso Alcala announced on Wednesday initial figures of P2.9-billion worth of damage to agriculture and losses of 133,000 metric tons (MT) to the country’s rice production after Santi ravaged Northern and Central Luzon on Saturday.

Last month, according to government statistics, the average price of regular milled rice soared to an all-time high of P36.04 per kilogram, increasing 23 percent from P29.38 at the height of the rice crisis in 2008.

Despite these developments, DA Undersecretary Dante de Lima said they are hoping to come up with a “final report including recommendations on Friday,” a full week after Santi struck on Saturday.

Slowpoke response
In a statement last week, economist Roehlano Briones from the country’s foremost government think tank, Philippine Institute for Development Studies, had criticized government’s management of its rice self-sufficiency program, recommending instead for a private sector-led importation scheme as “private traders can make real time responses to day-to-day movements in supply and demand.”

“Government response is not as rapid given bureaucratic procedures inherent in its decision-making. Moreover its decisions tend to be highly politicized rather than reflective of market conditions,” said the UP-trained economist in support of National Economic Development Authority (NEDA) director general, Secretary Arsenio Balisacan’s 20 September 2011 memorandum for the President.

Balisacan’s memorandum, also “under review” by the DA, warns of a deficit of as much as 1.4 million metric tons (MT), “even if production rebounds” in the fourth quarter of this year, and thus, recommends “importation of at least 0.5 million MT should be immediately pursued to address the projected supply gap and stabilize prices and possibly lower them.”

But even as Balisacan had proposed importation as an option to address the supply gap, the NEDA, in previous policy pronouncements, maintained that, “importation should be the domain of the private sector.

Balisacan, himself a former agricultural undersecretary has also consistently advocated against government-led importations supposedly because of its tendency for corruption.

“Rice importation should also be increasingly made a private sector domain, thereby relieving the NFA [National Food Authority] of the burden of handling rice imports (and the pressure for corruption associated with the handling of import quotas),” he wrote in a published policy paper (Securing Rice, Reducing Poverty: Challenges and Policy Directions, Balisacan & Sebastian, 2006).

Under probe
Crusader lawyer Argee Guevarra had previously disclosed that the DA and NFA’s government-to-government importation in April 2013 was overpriced by nearly P500 million.

Guevarra’s revelations were cited in separate resolutions filed by Sen. Loren Legarda and Reps., Gary Alejano and Francisco Ashley Acedillo of Magdalo party-list, which paved the way for ongoing inquiries in the Senate and House of Representatives respectively.

“The questionable importation by the NFA of 187,000 metric tons [plus an additional 18,700]of rice under a government-to-government [G2G] agreement last April . . . is overpriced by as much as P457 million for a single transaction,” wrote Guevarra in a letter to Department of Justice Secretary Leila de Lima and Ombudsman Conchita Carpio Morales urging the Inter-Agency Anti-Graft Coordinating Council to look into the allegedly anomalous transaction.


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  1. Prices of rice only goes up when a lot of rice fields are destroyed by a calamity. This is wrong! Prices should stay high due to expensive fertilizers, pesticides, diesels, etc. That is why younger generations don’t want to be farmers because they know that they don’t benefit them or improve their way of living. The Government should help and support our fellow farmers because, they are the poor people that feeds our country.