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Apr 23

Fixing the Rice Problem Leaving Others Unattended

Arab News

Fixing the Rice Problem Leaving Others Unattended

 by Manuel L. Quezon III

Since the modern presidency began in 1935, Philippine presidents have obsessed over rice. President Gloria Macapagal-Arroyo happens to be a chief executive with a better historical sense than most of her recent predecessors. After all, the burden of history is particularly heavy on her shoulders.

She knows a rice shortage helped ensure her father’s victory in 1961, and a rice shortage helped ensure that he went down to electoral defeat in 1965. She therefore knows that food is the ultimate political question.

As one of my favorite Filipino bloggers, The Warrior Lawyer, recently put it, rice is a political commodity. Every administration, bar none, has been sensitive to rice prices and rice supplies. After all, a recent report, quoting the International Rice Research Institute in Los Banos, points out the Philippines has imported rice almost every year since 1869, far more recently than say, Java, Indonesia’s most populous island, which has been an importer since the 16th century. And every administration has tried to attend to this shortfall in rice supplies, by bureaucratizing it. The NARIC, or National Rice and Corn Corporation, was established in 1936.

It became the BIBA, or Bigasan ng Bayan during the Japanese Occupation. When Manuel Roxas had to decide how he’d deal with the dilemma of having to serve in the government during the Japanese occupation, he decided the best way would be to take charge of the Bigasan ng Bayan.

Recently, Chief Justice Puno gave the inaugural lecture for a three-year presidential lecture series organized by Upsilon Sigma Phi at UP Los Banos. His lecture was on Jose P. Laurel, and in it, he quoted this exhortation made by Laurel to rice farmers in August 1944. “The government,” Laurel said, “while recognizing your right to live, imposes upon you the obligation to help your countrymen in the same way that you will be helped so that not only you may live but also all your countrymen.”

Puno pointed out that with skyrocketing inflation, Laurel also created special courts to try profiteers, increased penalties for those who unjustly increased prices and raised government salaries. Rice had gone from 5 Pesos a sack prior to the war, to 45 Pesos by 1943, for example.

This is, actually, about all that governments can do, when faced with the law of supply and demand.

Here’s something written 60 years ago, by Teodoro M. Locsin in the Philippines Free Press: “In a private business,” he pointed out, “inefficiency is punished by ruin, so the employee who idles and loafs is canned. The manager must know his business — or else. It is not so in a government corporation.”

On the other hand, “In a government corporation, appointment to the most responsible position is dictated first by politics, secondly and incidentally by qualifications. A government corporation is the natural home of lame ducks. The dumber you are, the better. Independent thought is subversive, imaginative planning is the quality of a man who can think for himself — a dangerous man, one to get quickly rid of. The dumber you are, the better…”

“And,” he tartly observed, “nobody gets fired.”

There’s a saying you all know — the more things change, the more they stay the same.

Sometimes, presidents try to reinvigorate the bureaucracy by renaming agencies. And so, Naric became the National Grains Authority under President Marcos and then he rebranded it once more as the NFA or National Food Authority in 1981.

In a recent article on the Asia Foundation blog, Bruce Tolentino and Thupten Norbu pointed out that what sets our government apart from the governments of other developing Asian nations is that we’re the only country that continues impose a state monopoly on the international trade of rice.

So the headache is this: an inefficient, corruption-filled organization, the NFA, which has always lost money, has to lose more money, with no guarantee that it can even meet demand, which keeps going up. This is where the politics of Palay comes in.

The Asia Sentinel tells us there simply isn’t enough rice being grown, for a growing global population. Because of this, normally rice-exporting countries are pressured to limit exports, to ensure they feed their own people; this makes prices higher, which adds pressure on governments as rice growers get irritated with the political requirement of governments to keep prices low, while rice growers see rice prices going higher and higher overseas.

But just as in past administrations, it’s not just the price of rice alone everyone has to contend with. The prices of everything are going up. What does that mean for us? Arthur Yap, secretary of agriculture, suggested fast-food restaurants serve less rice to customers. He got crucified in the media.

But the truth is, we do eat more rice. A recent Philippine Daily Inquirer editorial pointed out that per person, we consume more rice than ever before: Between 1990 and 2007, there’s been a 15-kilo increase in per capita consumption, which means an additional 1.275 million MT in consumption. Add to this, there are more of us than every before: From 60.7 million in 1990 to 90.4 million in 2008.

Still, government says we only have to deal with a shortfall in supply until July. After that, we can look forward to some good news.

According to the UN Food and Agriculture Organization (FAO) just on April 2, global rice production is expected to increase by 1.8 percent — or 12 million MT — this year, which will hopefully result in surpluses for Vietnam and Thailand, from whom we import rice.

So with all the things government’s doing, why are people still panicking? The answer is inflation. From 2.2 percent in March, 2007, it went to 6.4 percent last month. Together with rice, there’s the increasing price of oil, and fears of a downturn in the global economy, to which the relatively small productive portion of the Philippine economy not dependent on government funds, is attached.

Just a week or so ago, the IMF cut its 2008 outlook for global economic growth for the second time this year. Global growth is expected to reach 3.7 percent in 2008 — down from the 4.1 percent forecast last January. The World Bank, Asian Development Bank and UN have lowered their growth forecasts for Asian economies, warning that growing inflation from food and energy prices might take its toll. And the Philippine government doesn’t seem to know what to do.

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