Analysis
RP rice crisis mirrors face of global food price apocalypse
By Amando Doronila
Philippine Daily Inquirer
First Posted 04:13:00 04/28/2008
MANILA, Philippines—Of all crises encountered by this government since 2004, nothing is more threatening to its survival and more menacing to the 11 million poorest Filipinos than the current rice crisis.
Food shortages and skyrocketing prices of rice, the Filipino staple, are not just a “local Philippine problem.” The Philippine “rice crisis” mirrors the global apocalyptic face of rising food prices described by the United Nations World Food Program as a “silent tsunami of hunger, threatening the lives of 20 million of the world’s poorest children.” And “galloping food inflation is rising,” not exempting the Philippines.
Filipinos, their government especially, cannot seek comfort behind this global perspective in the complacent thought that “we are not suffering alone.”
The nervous Philippine government, hiding its head in the sand, has used this perspective to dodge responsibility for the shortage and has embarked on an extremely expensive emergency rice procurement program in the world market to fill a short supply in order to stave off a feared political catastrophe.
The government and the public are watching TV nervously for any small sign of tempers flaring in the growing queues for cheap rice at the NFA (National Food Authority) stores, fearing this could spark rioting that created civil unrest in many parts of Asia and Africa in the past few weeks.
‘A real global crisis’
On Friday, UN Secretary General Ban Ki-moon warned that the steeply rising prices of food had “developed into a real global crisis.”
The food price inflation in the Philippines would provide the tinder flash point of civil disorder more explosive than the three coup attempts since 2003, three impeachment attempts against President Gloria Macapagal-Arroyo and several calls for “people power” to force her to resign. None of these disturbances had anything to do with inflationary prices of food and hunger.
The Economist, in a cover story this month, dispassionately explained the practical impact of food inflation on poor countries.
“The middle classes are giving up health care, and cutting out meat so they can eat three meals a day,” it said. “The middling poor, those on US$2 a day, are pulling children from school and cutting back on meat, vegetables and one or two meals so they can afford one bowl. The desperate—those on 50c—face disaster.”
Given that 1 billion of the world’s 6 billion people live on $1 a day, and another 1.5 billion exist on $2 a day, any extended period of high food prices would be devastating.”
RP poor most vulnerable
Where do the Philippines’s poor belong on this scale? They are the most vulnerable to the impact of this price inflation.
In a recent privilege speech, Sen. Edgardo Angara, agriculture secretary in the Estrada administration, said, “The difficulty is not the supply, but the purchasing power of the people.”
He said, “Almost 40 percent of our people subsist on less than $2 a day, the poorest on less than a dollar a day. Those people cannot afford to buy rice and rice is one-half of the food budget. That’s where the safety net must be put out.”
The exchange rate is P42 to $1—which can buy less than three kilos of NFA rice. According to the International Food Policy Research Institute, about 13.5 percent or about 11 million Filipinos live on less than $1 a day, 9.1 percent or 7.4 million on 75 cents to $1, and 4.4 percent or 3.6 million on 50 to 60 cents—the bulk of the poor forming the rice queues.
Procurement
This most vulnerable group is the target of the emergency rice procurement program.
The government has allocated P5 billion in subsidies to 300,000 poor Filipino families in the 20 poorest provinces to enable them to cope with high prices in addition to the three kilos of subsidized rice at NFA outlets.
It is scrambling to import 2.2 million metric tons of rice to fill a production shortfall, as an emergency measure to avert shortages in the lean months of July to September. The costs of imports are rising steeply in the face of dwindling rice supply from main rice-producing countries—Vietnam, Thailand and India, which are clamping down on their exports.
The NFA has accumulated P48 billion in losses and P69 billion in debts over several years of importing rice. According to Angara, NFA losses are expected to reach P111 billion and its debts to mount to P136 billion by 2010.
Distorted priorities
These subsidies have diverted enormous funds from long-term rice production programs planned to ensure rice self-sufficiency. They have distorted the priorities of these programs and rendered them irrelevant solutions to immediate demands of averting political unrest.
The emergency package of measures announced by the President in a crash program in the last food summit has been reduced to a pipe dream. She allocated P47 billion for this program over the next two years. It raises false hopes and is useless to cope with the current requirements of political stability.
Even the prospects of procuring rice supplies as buffer stock for the lean months are in doubt. Vietnam announced on Saturday that it would keep its ban on rice exports through June to ensure domestic supply. The Philippines will open another round of auctions on May 5 for a total supply of 500,000 tons amid sharply rising prices at the sources.
While the dire warnings from the United Nations of the “perfect storm” threatening the Third World center on rising food prices and shortages, the watch in the Philippines is on the rice lines for signs of political explosion.
Watch on rice lines
A series of the Inquirer surveying the mood on the rice lines reported still happy faces in the crowds, happy to receive their cheap rice rations from NFA.
But then, the report also noted that a local TV news program showed a footage of “an angry woman, yelling for a rolling store to open up as the sun blazed and the sweating queue stretched longer and longer.”
The face of crisis depends on where you stand from the rice lines.
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