This story
was taken from Bulatlat, the Philippines's alternative weekly
newsmagazine (www.bulatlat.com, www.bulatlat.net, www.bulatlat.org).
Vol. VI, No. 3, February 19-25, 2006
Rice Crisis
Looms
Rice is the
staple food of Filipinos. Ironically, the country is now one of the top
importers of rice grains from being a net exporter in the 1980s. With only six
percent of world rice production available in the international market and with
the projected increases in imports to China, the Philippines will have to
compete with the limited supply by buying at higher prices. This will be a
situation that the Philippines can hardly afford.
BY AUBREY SC
MAKILAN Despite the
Philippine government projection of self-sufficiency in rice by 2009, the
country remains among the world’s top importers of rice grains, being among the
top three in 1999 and fifth highest in 2004. With the potential increase in the
importation of rice grains by China, the Philippines, which is dependent on rice
grain imports since the 1980s, might be in trouble, said Duncan Macintosh,
spokesperson of the International Rice Research Institute (IRRI). Worse, Rex
Estoperez, Director for Public Affairs of the National Food Authority (NFA),
admitted that the only way the country could cope with this situation is to
contract more loans to be able to purchase enough grains for local consumption .
Limited
supply For the last
six years, Macintosh said, China has been experiencing a decrease in its
production of rice grains. Urban development, liberalized policies, which
resulted to diversified farming, and measures instituted by China to protect its
environment were some of the factors that affected its rice yield. As a result,
China had to import rice grains. “And this is
a bad news for the Philippines and good news for the exporters,” he said. In an
interview with Bulatlat, Macintosh said that in 2004, China imported only
one percent of its domestic demand. But given the population of China, this was
already equivalent to 10 percent of the world’s demand, said Macintosh, or five
times the imports of Indonesia or 10 times that of the Philippines. Also, the
prices in the international market of rice grains increased by 40 percent in
2004. Only six percent of world rice production is traded, said Macintosh. Thus,
supply in the world market is limited. Because of this, Macintosh said, prices
tend to react quickly to changes in demand. Prices will continue to rise as
China increases its imports. Wit the upward trend in grain prices, importers
tend to hoard their supplies thereby triggering more price increases. If China
increases its imports and prices increase, Estoperez admitted they have no other
choice but to contract more loans in order to compete with other importers.
This, he said, is nothing new anyway. The NFA is in
charge “of ensuring the food security of
the country and the stability in the supply and price of the staple grain-rice.” Aside from
its imports, the NFA also counts on the imports of private corporations for its
15-30 day buffer stock. Estoperez
however said they could not force private corporations to import rice if prices
shoot up in the international market. If that happens, the government needs to
further increase its imports by contracting more loans, he said.
Unfortunately, additional volume in imports would only mean additional tariff
payments and losses for the department, he lamented. Even the P900
million budget of the agency is not enough, he said. He said that
tariff payments alone cost them about P13 billion, excluding the three to four
percent interest payments on loans for paying tariffs. If the loan was made from
commercial banks, higher interest rates of seven to eight percent per annum are
charged. The NFA is
currently monitoring the importation of China to be able to prepare for the
stiff competition From being
exporter to importer of grains Twenty years
ago, the Philippines was a net exporter of rice grains. During the Marcos
administration, the country was still able to export a portion of its total
produce while leaving the country with sufficient supply. However, the
slowing growth in farm output has made the Philippines one of the world’s top
rice importers in 2005. The annual
consumption of rice per capita has also risen from 90 kilos in 2001 to 115 kilos
at present. This is because, Estoperez said, many have shifted to rice since the
price of corn increased. Last year,
rice grain yield was 14,603,000 metric tons. Despite a not so very significant
decrease in palay (rice grain) production, the NFA almost doubled its imports
from 983, 975 metric tons in 2004 to 1,849, 843 metric tons last year. The agency
normally imports rice every March. But the NFA has already started importing
December last year, to maintain its 15-30 day buffer stock. On Feb. 7, it again
imported 400,000 metric tons of rice grains and is anticipating the 438,000
metric ton imports of the private sector. Early importing, Estoperez said, could
also prevent competition with other importers. The country
is basically dependent on rice importation especially from Thailand and Vietnam.
Whenever there is a rice shortage in the world market, the food security of the
country is also endangered. And even with
the planned importations, Willy Marbella, Kilusang Magbubukid ng Pilipinas (KMP
or Peasant Movement in the Philippines) secretary general, revealed that the
country still experiences rice shortages. He said that in 1995 the NFA had to
import more as the expected yield decreased by one percent thereby affecting the
buffer stock. The rice grains yield continues to decrease annually and the
shortage has already hit seven percent last year. Land
conversion The KMP and
the NFA both agreed that one of the main factors that led to the decrease in
rice grain yield is the land-use conversion policy of the government. “While the
population increases, area cultivated to rice get smaller,” Estoperez said. Based on the
November 2004 report of the National Census and Statistics Office, land area
planted with rice in the seven provinces of Central Luzon, the rice granary of
the country, have dropped by 12.7 percent from 1991 to 2002. Worse, Estoperez
added, most fields in Nueva Ecija are prone to flooding. Marbella said
that land conversion intensified during the Ramos administration, in accordance
with its Philippines 2000 or the Medium
Term Philippine Development Plan (MTPDP). The 2003 data from the
Presidential Agrarian Reform Council showed that about 40,000 hectares have
already been converted for eco-tourism purposes. Meanwhile,
Marbella also said that there are 2,383 cases involving land use conversion
filed before the Department of Agrarian
Reform Adjudication Board (DARAB) from 1988-2001.
Self-sufficiency Despite being
a net importer of rice grains, the Philippines still expects to produce all the
rice its growing population needs by 2009, when output is projected to hit a
record 16.7 million metric tons. The government plans to boost rice grains
production by expanding the area planted to hybrid rice and improving the
delivery of irrigation services. Estoperez
said achieving self sufficiency “depends on the political will and policy” of
its implementors. But Marbella
argued that the goal of self-sufficiency in rice is “far from reality” unless
“genuine land reform” is implemented. The country, Marbella said, can achieve
self-sufficiency only if lands are distributed to the farmers; a moratorium on
land use conversion is enforced; and the country gets out of the World Trade
Organization (WTO). Marbella said
that prior to the WTO, the country had an agricultural trade surplus of around
US$1.2 billion. But in 1999, the country’s trade in agriculture resulted in a
deficit of US$3.1 billion. In 2001, the deficit ballooned to US$5.2 billion. Estoperez
admitted that the policy of contracting more loans to secure the country’s rice
grains supply is not sustainable. “It high time
for us, the Congress and the common tao (common people), to come up with a
better policy,” he said. “’Di pwedeng taun-taon ganyan e.” (We cannot implement
the same policy every year.) Meanwhile,
Marbella cited how Thailand was able to remain as a net exporter of rice. In an
international conference, he asked a Thailander how they are able to provide for
the country’s needs while at the same time export rice grains. The Thailander
shared that their government subsidizes the needs of rice farmers and has an
efficient policy governing the export of rice grains. On the other
hand, Estoperez said, the Philippine government has no financial capacity to
subsidize farmers. Bulatlat © 2006 Bulatlat
■
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Bulatlat
Agricultural output last year rose only 2.24 percent, missing the official
target of three to four percent due to drought, said the Department of
Agriculture (DA).
The area planted to hybrid rice is expected to reach 500,000 hectares this year
from around 330,000 hectares last year. The Philippines plants 4.1 million
hectares to rice. But, Marbella said, planting hybrid rice increases the costs
of farmers. Hybrid rice are terminator seeds. Unlike traditional seeds,
Marbella said, terminator seeds can be used only once. Farmers need to buy seeds
every planting season.