Anatomy of the rice crisis (1)

While I don’t believe the observation of Reuters, the German news agency, that the looming rice crisis could affect the political future of Gloria Macapagal Arroyo, I am of the opinion that a rice shortage could spawn a crisis that can derail the ambitions of many other politicians—ruling or opposition. It could, at the worst, end the unbelievably lucky run of GMA’s executive officials and allies who are casting a moist eye on politics.

My view is that the GMA show will not risk a re-run in 2010, if elections are held. Her pathetic performance is about to end. She is bruised. Her government is badly broken and needs to be fixed, while the current crop of pretenders to her throne—who belong to the traditional political elite that the people have been expressing resentment against survey after survey—do not realize the immediacy of the problem, and thus are not prescribing any viable solution to it.

Rice, the Filipinos’s basic food staple, is both an economic and a political issue, and a rice crisis—shortage and price hike—is a volatile problem. It presents few or no options at all to a growing number of citizens who are clutching their empty stomachs and gazing absently to an uncertain future. With their shirtless backs against the wall, our hungry millions might just recover their senses and fight back, not with arms which they don’t have, but with their votes, which they could use in 2010.

Sen. Mar Roxas, one of the few politicians whose feet remain firmly on the ground despite his presidential ambition, is right. We have a problem—a rice crisis—in our hands, but we refuse to admit it and act as if it doesn’t exist.

“There’s an adequate supply of rice,” the National Food Authority says. But look, President Arroyo went out of her way last February to request Nguyen Tan Dung, Vietnam’s Prime Minister, to sell the country 1.5 million metric tons of rice, only to be told that Hanoi could only sell Manila 1 million metric tons.

“There is no need for alarm. There is ample supply of basic goods, such as rice, meat, vegetables, canned goods, and other basic commodities,” said Department of Trade and Industry secretary Peter B. Favila.

Well, Mr. Favila, I am alarmed, because the price of rice has gone up 30 percent in just over a year. If we have enough rice, just as you say and just as the NFA says, why are we importing 2.1 metric tons of the grain this year? And why suddenly the government is acting strange: suddenly frantic and confused? I am anxious to hear Mr. Palengke's take on Mr. Favila's assertion.

We have a rice crisis, but instead of rolling up our sleeves to find a sensible solution, our agriculture officials are lulling us into believing we have enough rice.

When Arthur Yap, the agriculture secretary, said last week that the government has an “all-encompassing” strategy to deal with what he described as “unprecedented” rice shortage and rising rice prices, I was looking at government encouraging farmers to hold on to their farms and discouraging them from selling their lands for conversion into golf courses and construction sites of warehouses for smuggled luxury goods.

I was hoping government would reverse its policy of favoring short-term gain over long-term good. That’s the government direction in agriculture. It wants farmers to plant cash crops for export, rather than increase agricultural production of staple food for domestic consumption, which is the key to national food security.

The “all-encompassing” strategy I was hoping for was a no non-sense drive to weed out corruption in the Bureau of Customs and the NFA, some of whose officials are captive of the grains mafia. I was also hoping GMA will order the police not to give the rice hoarders all over the country a breathing room by prosecuting them until they mend their ways—or until they stop their nefarious trade. Sikmura ng taong bayan ang nakataya rito.

My hopes were dashed. None of the above practical measures figure out in Yap’s “all-encompassing” strategy. It turns out that his strategy is more alarming than Favila’s assurances of adequate supply.

Yap warned the people to conserve rice, and hinted he would ask restaurant owners to serve only “half-rice” servings to their customers. By any measure, this is not a strategy. This is an idiotic admonition to us not to eat rice. But, pray tell, how can an already hungry population conserve rice when there is no rice at all to conserve?

To appreciate fully the gravity of the rice crisis, let’s take a look at some rice arithmetic.

• The country’s rice production is merely 16.3 million metric tons in 2007. The target for 2008 is 17.3 million metric tons or just a 6 percent growth. This production—which is only 92 percent of the national sufficiency level—must increase by at least double to satisfy a population growing by at least 2.3 percent per year.
• Our 90 million people consume 33 million kilos (32,500 metric tons) of rice per day. That’s about 12 million metric tons per year.
• The price of the grain has gone up from US$500 per metric ton to about US$750 per metric ton this year. NFA sells its rice for about P18.25 per kilo; non-NFA commercial rice, P24 to P26 a kilo.
• The NFA, which buys and sells rice at a subsidy, is in debt by at least US$1 billion. It is asking for more money, but its record thus far in stabilizing rice price and supply is wanting. It cannot even compete with the rice cartel and rice hoarders even if it spent P10 billion in tax expense subsidies in 2007. It plans to import 2.1 million metric tons this year to make up for the supply shortfall. At US$750, that’s a whopping US$1.6 billion.

The real causes of the rice crisis are not hard to pinpoint, one of which is the rampant graft and corruption in the NFA. Just last month, the NFA provincial manager in Misamis Oriental was ordered charged in court for allegedly selling NFA rice to commercial rice traders for P25 to P30 a kilo.

I am sure this is not the first or the last crime of economic sabotage committed in the agency. How many millions of tons of rice intended for GMA’s Tindahan Natin have been diverted and sold to the commercial market? We don’t know. (To be continued)