ARE WE READY FOR this? Rice prices will increase again, by up to 60 percent.
This comes not from me but from international rice traders. This is from the Inquirer report on the World Rice Conference held in Cebu in October: “Traders said it would be more likely for the benchmark 100 percent B grade white rice, currently priced at around $500 a ton, to go up to $600 to $800 a ton due to production shortfalls in India due to drought, and in the Philippines due to storms.”
The current price of $500 per metric ton is already almost twice the 2007 price of $295. Our cheapest commercial rice, now P32/kilo, will cost at least P38.40 next year. At most, P51.20!
The Philippines, the world’s largest rice importer, lost 500,000 metric tons to “Ondoy” and “Pepeng.” In 2008 we imported 2.3 million tons, which was a record already. Now we may have to import as much as 3 million tons in 2010.
It’s still the rice traders saying that, not me.
India, the world’s second largest rice exporter, will import up to 3 million tons in 2010 due to an 18-percent drop in production this year. Agriculture officials in the United States, the fourth largest rice exporter, forecast a 2.7-percent drop in world rice production, and US traders are saying the price of US rice will increase by up to 33 percent.
Those are market forces at play—with the forces of nature.
Who will pay for these huge increases?
If government does not absorb the price increases, how many families can afford rice at P51.20/kilo? If government subsidizes them, it would be adding tens of billions more to our budget deficit, which is already forecast to hit P300 billion this year. That’s tens of billions borrowed from future tax collections, going to farmers in Thailand and Vietnam instead of our own.
It’s a catch-22 situation. Whatever government does, all of us will suffer. With subsidies we will suffer as taxpayers. Without subsidies we will suffer as consumers.
What can the next administration do about this?
The price of rice will continue to rise. We can no longer afford to depend on imports to feed our people. It’s time to address our perennial shortage in rice production.
Our average production, 3.1 tons per hectare, is bigger than Thailand’s, which is only 2.4 tons per hectare. But Thailand has 4.7 million hectares of irrigated rice fields and we only have 1.5 million.
We have another 1.5 million hectares of irrigable farms. If they are irrigated, we have the potential to double our rice production. That means we can become a rice exporter instead of being the world’s leading importer.
Irrigating 1.5 million hectares will cost a lot in government funds, of course. But the benefits will be just as enormous. Short term: thousands of jobs in the provinces where jobs are needed most right now as soon as we start building the irrigation infrastructures. Local economies will grow and local governments will become stronger, financially.
Long term: we won’t have to depend on our neighbors to feed our own people.
—JEJOMAR C. BINAY,
mayor, Makati City and president,
United Opposition
