Rice with ‘bukbok’, please

What’s the big deal?” Agriculture Secretary Emmanuel Piñol asked “Headstart” host Karen Davila, who was pressing him on whether the imported rice found infested with weevils or “bukbok” was safe for humans to eat. “Serve me that ‘bukbok’ rice, I will eat it,” dared Piñol.

Poor Filipinos reeling from the unabated increase in the prices of basic commodities may have no choice but to take Piñol’s word for it and indeed eat the weevil-infested and fumigated rice, as it means paying less for the basic staple bought by 93.39 percent of Filipino households.

The prices of rice and palay have risen every month since last year, and reached new record highs in the second week of August. According to the Philippine Statistics Authority’s latest price monitoring report, retail prices of regular and well-milled rice have hit a high of P42.58 and P46.06 a kilo, respectively—higher by 12.08 and 9.17 percent compared to August last year.

Rice from the National Food Authority, on the other hand, retails cheaper—around P27 to P32 a kilo—but it’s become alarmingly scarce.

What’s causing the rice crisis? It’s due to a combination of factors, including rising global oil prices and a weaker peso that has increased crop production costs. But the most consequential blow, it seems, came from the wipeout of buffer rice stocks that the NFA is supposed to keep in its inventory, precisely to keep rice prices stable.

The chilling announcement by the NFA in April this year that it had hardly any rice in stock sent a strong signal to the market to increase the prices of commercial rice. There was simply no competition from a large alternative source of cheaper rice to temper market prices. And this triggered a series of unfortunate events.

Inflation accelerated to 5.7 percent in July—the fastest in five years—reducing a family’s purchasing power of P10,000 last year to just P9,430 last month. Accelerating inflation then prompted the Bangko Sentral ng Pilipinas to help rein in surging prices by hiking its overnight borrowing rate.

All these could have been averted if only government officials did not let paralyzing policy, and even personal differences, get in the way of fulfilling the NFA’s mandate to keep at least 15 days’ worth of rice in stock.

An April 2017 commentary by Global Source already signaled that the government’s rice policy could “shock” inflation forecasts. And it did.

The paper narrated how, early last year, President Duterte “curiously and unceremoniously” fired the undersecretary of one of his most trusted aides,

Cabinet Secretary and NFA Council chair Leoncio Evasco Jr., for supposedly insisting on importing rice. Mr. Duterte later announced that the NFA should buy from local farmers instead.

The controversy revealed a power struggle within the NFA; it wasn’t even the issue of whether to import rice or not, as the NFA rice stock as of March 2017 was down to just 12 days’ worth of consumption and would need imported stocks to meet the higher buffer of 30 days’ worth during the lean months. The issue was turf—who was going to import: the NFA, as pushed by the NFA administrator, or private traders, as favored by the NFA Council?

In the end, the camp of NFA administrator Jason Aquino won, with Mr. Duterte directing the agency to go ahead with the importation of 250,000 metric tons of rice to beef up buffer stocks. Evasco was removed from the NFA Council, and the NFA removed from the Office of the President and put back under the Department of Agriculture.

It now appears that the drawn-out decision to import was a case of too little, too late; while the first tranche of rice imports arrived in June, it has not helped bring down rice prices. There is simply not enough to go around, with local government units reporting commercial prices spiking to as high as P70 a kilo in some remote villages. The Zamboanga City Council placed the city under a state of calamity on Aug. 20 over the rice shortage.

Now there are calls to abolish the NFA and immediately pass the rice tariffication bill. While the wrangling drags on, the public, particularly the poor, are faced with two stark choices: allocate a bigger part of their meager budget for readily available commercial rice, or scrounge for much cheaper NFA rice, with or without “bukbok.”