------------------------------------------------------------- Arroyo warned on rice crisis
By Gil C. Cabacungan Jr. Philippine Daily Inquirer First Posted 02:12:00 03/24/2008
MANILA, Philippines—Sen. Loren Legarda Sunday warned that the Arroyo administration was facing a “politically explosive” situation with the price of rice hitting its highest level in more than three decades and urged that it undertake a massive rice-planting program.
“Rice is an extremely sensitive political commodity. There is no question a big surge in the staple’s price is bound to spur social unrest and political instability,” said Legarda, the chair of the Senate economic affairs committee.
She said that if the Philippines continued to be a rice importer, “we could suffer considerably, once rice prices double or triple due to severe shortages, just like what is happening to us now as a result of the surge in oil prices.”
“But oil and rice are totally different commodities. We can ask people to try to consume less oil, and they may cooperate. But we can’t ask people to consume less rice without inviting trouble,” she said.
In Baguio City Sunday, President Gloria Macapagal-Arroyo acknowledged there was “scarcity of rice” because of global warming and increased world demand, but there was no shortage of the commodity and there was no reason for the Filipino public to panic.
Ms Arroyo said there was no rice shortage “because that is a physical phenomenon where people line up on the streets to buy rice.”
“Do you see lines today?” she asked. She said she had to negotiate with the Vietnamese to get assurances that the Philippines would be able to continue to buy rice from Vietnam although not at preferential rates.
Legarda reported that rice prices surged to a 34-year high with the government’s tender of $708 per metric ton on March 18 or more than half of what it bid for its orders for January. At P30 per kilo, the government’s latest rice purchase cost more than 60 percent of the National Food Authority’s subsidized price of P18.25 per kilo.
Filipinos eat roughly 11.9 million metric tons (MT) of rice a year with only 92 percent coming from domestic sources.
Massive planting needed
The Department of Agriculture has programmed as much as 2.4 million MT of rice imports this year, but the decision of Vietnam and India, two of the world’s biggest rice sources, to freeze exports has contributed heavily to the tightening of supplies in the world market.
Instead of relying solely on imports, Legarda proposed that the government undertake a massive rice planting program over the next 24 to 36 months to make the country more reliant on domestic production.
She said the government should funnel all the P17 billion in annual funds for the Agriculture and Fisheries Modernization Program and the P6-billion Agricultural Competitiveness Enhancement Fund exclusively to this effort, which would include purchasing potent seeds, boosting irrigation, improving post-harvest facilities and shoring up water-holding facilities.
“Strong local production is the best remedy for any menacing deficiency. Ample supply is the surest way for us to ward off higher rice prices as well as broader consumer price increases that may be associated with rice price inflation. This is the only way for us to cope with the nearing rice scarcity. We should be self-reliant in the staple in short order. This is perfectly achievable,” Legarda said.
Real threat
Sen. Manuel Roxas II said the government could not hide from the “real threat” of a rice crisis as he urged authorities to face this problem rather than belittle it as a mere conservation problem.
“Mrs. President, be a force for good by getting real. It’s better that we say here is the problem, here is the solution, instead of saying there is no problem but prices will go up,” he said in a statement.
Roxas, who chairs the Senate committee on trade and commerce, rebuked the government for being in denial and making contradictory claims.
“While declaring that we have no rice shortage, PGMA (Ms Arroyo) said prices would increase. How can this be? If there is no shortage, why will prices go up? Is it now the policy of government to make retail prices go up? Is the government now admitting that there is hoarding and manipulation and that it is helpless?” he said.
Roxas urged the government to treat the rice problem as a calamity and release emergency funds to avert a crisis.
Legarda said the NFA rice subsidies were not sustainable in the wake of spiraling rice prices in the world market and that this would encourage the diversion of the subsidized rice to the retail market by unscrupulous traders.
She said the government had no choice but to take drastic measures to boost the rice harvest because the government had failed to heed the warning signs of an imminent global rice shortage as early as three years ago.
Legarda cited the decision of the world’s biggest rice exporter, Thailand, to control rigorously foreign sales to secure its own needs; China’s move to start importing rice due to a major local shortage, and the decline in rice output growth in Asia—the world’s rice basket—to an annual average of just 1.1 percent in recent years versus 2.7 percent in the 1970s as the key factors that had precipitated the global rice shortfall.
Annual subsidies “are not sustainable, not when rice prices are as high as they are overseas,” Legarda said. She added that the big gap between foreign and local prices would create issues later, including opportunistic supply diversions.
The leftist Kilusang Magbubukid ng Pilipinas on Saturday said that Malacañang knew about the impending rice shortage as early as February but offered only “Band Aid” solutions, referring to a reported plea by the government to restaurants to serve “half-rice” portions.
Also on Saturday, the Kilusang Mayo Uno, another leftist group, warned that the rice crisis could spark “food riots” and “social chaos.” With reports from Jerome Aning and Vincent Cabrera, Inquirer Northern Luzon
