Philippines: The Rice Crisis and the Politics Behind

Planting rice is never fun. So goes the Filipino folksong describing the hardships a farmer must face in producing the country's staple food. But even with the increasing prices of rice which supposedly will benefit the farmers, planting rice remains as miserable and gloomy economic activity as before. The reason: the poor attention being given by the Philippine Government to the rice industry.

With the issue of food shortage around the world, however, things changed almost instantaneously. The Philippine Government has now given special focus to the rice industry with Gloria Macapagal Arroyo immediately announcing a US$1.17 billion (PhP48.7 billion) farming budget allocation. But is the move a serious response or is it just another Rovian Tactic to shift the attention of the public from the scandals the administration is facing?


The Rice Industry: Some Realities

According to the Department of Agriculture, rice production is consistently growing in the Philippines. In 1990, production was recorded at only 6.1 million metric tons (MT) but after ten years, the figure rose to 8.1 million MT. In the span of 16 years, production almost doubled with a growth recorded at 164-percent or an annual increase of 590 thousand metric tons (MT).

The increase, however, is just superficial as the country has been left behind by its neighboring countries in terms of rice production. In 2003, for instance, while its neighboring countries like Vietnam, Indonesia and Myanmar produce between 37.1 thousand and 46.3 thousand hectograms of rice per hectare, the Philippines is only staggering to produce 34.3 thousand hectograms for the same land area. This, despite the fact that the International Rice Research Institute (IRRI) is located in the country and this, despite the claims that the Philippines has been blessed with a fertile soil and a healthy climate. The country's increase in production is just achieved by increasing the planting area – which is not a big deal if large tracts of lands are still available to be tilled. The problem, land conversion is at a fast pace that in just a span of a few years, some two million hectares of rice lands were converted to residential subdivisions. Lost rice lands are only compensated by denuding forests which, according to the National Statistics Coordination Board (NSCB) of the Philippines, is at the rate of 1.4-percent per annum.

But why the poor yield per hectare? According to an Agriculture official who do not wish to be identified, Filipino rice farmers only get $0.24 each as opposed to their Thai and Japanese counterparts who get $0.72 to $0.96, respectively. As a result, a Filipino farmer can only till a maximum of two hectares per planting season as opposed to his Asian counterpart who can till an average of five hectares. With the country's strategy of increasing production by increasing the land area, it is therefore impossible to see the supply side satisfying the demand side. For this, the Philippines had been importing rice uninterruptedly since 1995 that average importation has been recorded at 1.2 million MT. And this will continue as consumption is also on the increase.

In 1990, per capita rice consumption is only 92.53 kilos a year or barely two sacks of rice per person. By the year 2000, the figure rose to 103.16 kilos. Last year, an average Filipino consumes up to 118.70 kilos or nearly two and a half sacks of rice.
One of the factors being blamed for the increasing rice consumption is the country's population growth. According to the National Statistics Office (NSO) the population growth rate is still high at an average rate of 2.04-percent per annum. This remains uncontrolled as the government would not enact tighter policies for fear of the Catholic Church. Ironically, though, the Philippine Constitution clearly states the separation of Church and State. For this failure, an average of 4,725 daily is being added to the population that by last year, the government statistics agency was able to officially record a population of 88.6 million.

Second, the increasing consumption rate is also being blamed at the failure of the economy to trickle down to the grassroots. As Jessica Cantos of the Rice Watch Association Network and Rolando Dy of the University of Asia and the Pacific pointed out, the people's reliance on rice as the staple food should have diminished and shifted to bread and pasta if the economic growth had been distributed equitably. The problem, the Arroyo Government's claim of an increasing gross national product (GNP) does not reflect the real situation among and between income groups. Even the NSCB agrees as the statistics board noted an increase in the country's poverty incidence which was 24.4-percent in 2003 to 26.9-percent in 2006. Lately, the Arroyo Government had been boasting of a 7.3-percent GNP growth for 2007 but unofficial reports have it that poverty statistics soared again to 33-percent level this year.

Because of these, current consumption of rice is at 33,000 MT of rice daily – a figure higher than what is actually produced.


Short-Range Policies Versus Long-Term Interests

According to the Senate Committee Report No. 54 delivered by Senator Ramon Magsaysay during the 13th Congress of the Philippines, the agriculture sector in the country has not received any adequate government support since the 17th century. This is because of the bias towards the idea of industrialization when in fact agriculture is predominantly the basis of the country's economy. Agriculture is seen as "backward" while industry is seen as "modern". Thus, the income earned from the export of agricultural products were diverted for the build up of the national industry.

This policy prevailed from government to government that nobody was surprised to see the Philippines signing the Uruguay Round of the General Agreements on Tariffs and Trades. The problem, no safety nets were prepared for the agriculture sector. Thus, when the local market traditionally reserved for Filipino farmers was opened to foreign players, consumers set aside the local produce as the latter is expensive.

Consistently, this is also the logic of the agriculture policies under the Arroyo Government. For instance, while sitting president Gloria Macapagal Arroyo announced of a US$1.17 billion farming budget allocation, only a meager portion of the amount is for the technical training of the farmers and none was mentioned for research and development. The largest portion, about US$479 million, was alloted for loans to farmers. The problem with this is that rice farmers are already buried in usury and giving them more loans without the required government support is just strangling them to death. Second, the present government lacks the proper accountability and there is no assurance that amount will indeed go to the target beneficiaries. A case in point is the Grand Swine Scandal wherein the Arroyo Government, through Quedancor, made available US$ 60.1 million (PhP2.5 billion) as loans for farmers. More than half of the fund, though, vanished questionably while the remaining amount was irregularly disbursed to four companies that are not qualified under the law. According to Senator Panfilo Lacson, the money could have been used to finance the 2004 election bids of Mrs. Arroyo and the candidates in her slate – a conjecture which is being strengthened by the continuing inaction of the present administration to investigate and punish the Quedancor officials involved.

Worse, the farmers are not only denied the proper support but the sector is also being used as a milking cow to advance some interests. For instance, there is this US$17.5 million (PhP 728 million) Fertilizer Scandal which involves Agriculture Under-Secretary Jocelyn Bolante, a close friend of the sitting-president's husband, Mike Arroyo. Based on the investigation of the Senate Blue Ribbon Committee, Bolante caused the release of the fertilizer fund but channeled it for other use. In short, the money was spent without the intended beneficiaries receiving any centavo nor a droplet of the liquid fertilizer.

The same is true with the rest of the 2004 special fund for agriculture. Prior to the 2004 elections the Department of Agriculture received US$ 67.4 million (P2.806 billion) for the purchase of farm inputs and implements before the May 2004 elections. The amount has been released and spent but when the Commission on Audit conducted an investigation, it was concluded that not a single farmer was able to receive any farm input or implement during the said year. Again, there are speculations that the amount was channeled to finance the election bids of Mrs. Arroyo and her allies.

These being the case, what then can be said of the recent concern of the sitting president to rice farmers in particular and the agricultural sector in general?


Just Another Rovian Tactic

It should be noted that early this year, the Arroyo Government has been assuring the public that there is no rice shortage in the country. Even independent economic analysts have been forecasting the same as the National Food Authority (NFA) had ample stocks to last for months and that the harvest season is yet to come. But when the Lozada expose on the ZTE Scandal became out of control, the government immediately shifted its stand and started carrying the issue of food security. This, in a way, became a clear Rovian tactic aimed at killing the messages thrown at the Arroyo Administration particularly on government mismanagement and rampant corruption.

True, the issue on food security is an issue that affects not only the Philippines but also the rest of the world. Even then, it cannot be said that the Arroyo government is just responding to the fact. First, when Mrs. Arroyo took over the reins of government, she already know that the trade imbalance with regards rice and other agricultural produce is already unfavorable to the country. As a matter of fact, the Philippines is already the largest importer of rice in the world. Still, she did nothing to correct this mess by at least giving special attention to the farmers.

Second, now that the country is already being threatened by food shortage, her policy is still leaning towards food importation. This had been made clear when the NFA's thrust for this year is to buy more rice from other countries rather than directly address the issue of high costs of production. The problem, rice producing countries like Thailand has instituted ban on exports of the staple food. To make the matters worse, other rice exporting countries also decided to form a cartel to regulate rice exports and prices. Thus, to quote Palawan Representative Abraham Mitra: What’s the use of your money if no rice is available at any price overseas? It’s like looking for water in the desert. You may be willing to exchange a bar of gold for a cup of water but it’s totally worthless if there’s not a single drop around.

Third, the sincerity of the government is also lacking as until now, no member of the local rice cartel has been caught and punished. What Arroyo government had been boasting in the last few weeks is the apprehension of the “Mosquito Gang” in Isabela – a loose organization of rice traders who are known for stocking a few hundred sacks of rice. What it failed to catch are the giant rice hoarders some of whom are known to be the members of “Binondo 9” – also a loose organization of rice traders known for hoarding tons of rice.

The sincerity is also lacking as the Arroyo government failed to catch rice smugglers. To note, in addition to the regular anti-smuggling agencies, Mrs. Arroyo has also organized the Presidential Anti-Smuggling Group (PASG). With the numerous anti-smuggling agencies of the government, how come there is no catch? Whether or not this just validate the rumors that some members of the first family are also involved in rice smuggling, nobody can tell. But one sure thing is that the PASG, one of highly financed agencies to eradicate smuggling, has concentrated its efforts mainly on curbing the smuggling of luxury cars rather than eliminating the smuggling of basic commodities. For this reason, rice smuggling continuous. If reports are to be believed, smuggled rice consists of 15-percent to 21-percent of the total rice imports of the country – a raison d'être of the Organization of Rice Exporting Countries. And this hurts more the local producers as their price becomes more and more uncompetitive due to the influx of smuggled rice.

Lastly, and the clearest evidence why the Arroyo Government is just warding off the issues on mismanagement and corruption, is her US$120 million (P5 billion) aid for the poor program. This she announced a few days ago with the idea of doling out a maximum of US$33 (PhP1,400) per poor family per month as an additional money to buy food for the table. In short, instead of addressing the root cause of the food security issue, Mrs. Arroyo will be issuing a placebo to show that she is a working president and thereby ward off the claims that are haunting her administration.

Will there be a way out of this mess?

At this point in time, one thing is certain: Properly addressing the problems on the local rice industry in the Philippines as well as responding to the threats of food security looks bleak. The primary reason for this is the fact that the Arroyo Government is fighting different battles on several fronts – the accusations being hurled against her with regards government mismanagement and corruption, her diving popularity ratings, and the issues of food security. But if she can win the the battle for her integrity, only then can she unite the nation to address the issue of food security.###



CREDITS:

All photos are courtesy of Global Giving

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