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Apr 29

Quick rice-related readings

Even as Farmers fleeing ancient centre of Philippine rice,government tries to look busy and at the same time give the impression it’s not lurching from one policy to another:


It seems the NFA bought some very expensive rice from bangkok last week. and a rice trader there says if we buy more, we’ll end up driving the price of rice further up. iran and indonesia too. were now the top importer of rice. how the mighty have fallen. hahahaha. for a country that was once an exporter… now buying from a country that was once an importer.
[From FROM RICE TO MEAT]

Malacañang says that yes, the president did give an interview to the asian wall street journal over the weekend. Press secretary Ignacio bunye says the president was asked if the nfa’s role will change in the rice procurement program. The president he says, gave a conditional answer, that if the prices of rice continue to rise -then they may have to boost local production and that means that yes, the nfa role will change. However bunye says that is talking in the long term. In the short term, bunye says the objective is to put food on the table and that is where NFA will play an important tole now. However pgma also quoted some analysts as saying that the price of rice will temper in the coming months of the second semester because eof talks that export restrictions will be lifted and that there is every indication that the harvest is good here. [From SAILING…]

Here’s an interesting tidbit:

And could this be true, Filipino-Americans are doing their fair share of hoarding in response to the crisis, even going so far as buying up rice in order to send to family members back in The Philippines? [From U.S. Stores Rationing Rice, Filipino Americans Hoarding?]

While the skeptics argue,

I too wonder if there really is a shortage as a friend from the north told me that rice is abundant and that if I would like, he would buy rice in the province for me. If what my friend is true, then we have all been taken for a big ride. The other scenario would to incite panic among the populace. With the prices of basic commodities reaching the stratosphere and with utilities costing more, clamor for Gloria to take extreme action could be pushed by unscrupulous allies. Talks of emergency powers are now being floated and for what reason we really cannot tell.
[From Faking And Exploiting Crises]

Examine the Rice Trading Centers Map. Why, for example, are rice prices the highest in Iloilo, when it’s in a favorable position to import its needs and the Visayas, officials have said, is self-sufficient when it comes to rice?

See Arroyo eyes cutback in gov’t rice subsidy and NFA told to keep buying price of palay at P17 until December.

Practical solutions time:

What is this holistic approach?

First, we need information. There are already discrete databases scattered across our country, which needs to find focus. PAGASA for instance is one such important point-man in this ever escalating race for Food Security, environmental cat and mouse game. While it is true that they’ve been provided with new equipment – like a new Supercomputer, this is still not enough. This country needs better climate modeling solutions. PAGASA need not only better equipment but these scientists, we need to take care of. We need to know how much and when rainfall will strike at greater accuracy and precision.

That said, we need an even strong coordination and focus from the realm of the academics. We need our environmental scientists from every university in this country to have access to all these discrete databases and be able to correlate that information to practical use. We need realtime correlation of information from our environment - from weather to soil condition to sea to everything. We need our scientists and PAGASA to be talking and working more so today. And we need this information available publicly, in easily accessible and understandable databases, wikis, etc. This information can be used by businesses, by communities, by farmers, by fishermen, by every Filipino to be able to work with the environment.
[From Of Food and Men]

Over at Global Voices, Mon Palatino provides a roundup of rice-related news, see Southeast Asia: Rice and food price crisis. Additional regional perspectives: see Cambodia Will Become A World Largest Rice Export Country and the following:

30 Years Ago Haiti Grew All the Rice It Needed. What Happened? The U.S. Role in Haiti’s Food Riots

and,

Higher food price means more income and more incentive to farmers to increase their production capacity. But its bad for the macro-economy especially inflation. Higher food price means higher inflation, and higher inflation hurt the poor by deteriorating their purchasing power. The problem is nearly 50% of Indonesia people life with 2$ a day, and also nearly 60% of the poor, around 23 million of 37 million, live in rural area.

The condition above create an anomaly in policy making. In one side the government must keep inflation and food price low enough so its does not hurt the poor. But on the other side the government must maintain a reasonable high price to give incentive to farmers to increase their production and increase rural welfare.

Is there any policy to achieve both objective above? Yes! Give high subsidy to the farmers like the Developed Countries do. But the problem is our government does not have the money to do it. Then they turn their head to the consumer, Cheap Food Politic.

The principle of Cheap Food Politic is as long as the food price cheap, the majority (poor) will keep silent. This policy is simply urban bias. Cheap food price is good for poor urban (the 40%), which main source of income is service and manufacturing sector. But bad for poor rural (the 60%), which main source of income is agriculture sector. Lower food price mean lower income and also lower welfare for rural area. The government sacrifice the rural for the sake of the urban. Why? Because poor urban is more attractive politically than poor rural.

[From Youthful Insight: Consumer or Farmer First? Anomaly and Inconsistency in Indonesia Agriculture Policy]

and,

[Asian] Rice laws and regulations are going in the wrong direction. It takes one back to the British Corn Laws,” says [Steve] Hanke.

“These mandated the virtually complete government regulation of British agriculture at the start of the nineteenth century.

“Fortunately, that yoke was removed in 1846. Thanks to the efforts of Richard Cobden, John Bright and the Anti-Corn Law League, the Corn Laws were repealed.

“This resulted in the promotion of free trade, the importation of cheap food and a major surge in British standards of living.

“What rice needs today isn’t more government meddling but a modern version of the Anti-Corn Law League.”
[From Indonesia’s Economy Blog – Sarapan Ekonomi]

and,

In yesterday’s China Daily there was an article titled “Pledge not to stop rice exports lauded.” The article states that COFCO, China’s leading grain, food oil and food import and export group — which apparently exports rice equal to 1% of the volume of internationally trade rice — will not cut rice exports. Given China’s own food supply problems, this is a commendable move if true because, as far as I understand, the supply of rice is close to crisis proportions in many Asian countries. And of course it doesn’t make China’s own food supply problems any easier, although my back-of-the-envelope calculation is that this probably affects less than one-half of one percent of total Chinese rice production. I suspect that a number of major governments along with the appropriate agencies — perhaps the World Bank and the Asian development Bank — are going to need to organize some coordinated response to the rice problems. Perhaps China can take the lead here.
[From Rice and margin]

and finally,

The Association of South East Asian Nations (ASEAN) already has a base to build from in serving as a framework for multilateral dialogue and collaboration in the management of food supplies and prices. ASEAN members include two of the world’s leading rice exporters, Thailand and Vietnam, as well as the leading rice importers, the Philippines and Indonesia. In the wake of the food crisis of the early 1970s, ASEAN has been, in fits and starts, organizing and tinkering with the ASEAN Food Security Reserve – an agreement among members to set aside and share rice stocks for situations just like this. It’s high time these discussions be accelerated and implemented.
[From In Asia » Blog Archive» Averting the Impending Food Crisis]

 

 

62 comments

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  1. magdiwang

    And this piece by Jubak as it is noteworthy to remember that the rules of equilibrium is somewhat different for the physical markets from the financial markets.

    In financial markets the primary dogma (price equilibrium efficiencies) for neo-liberal economics do not exist. So there is no normal supply and demand equation. This now is happening on a global scale.

    hvrds, are we in agreement now that there is no shortage of rice?

    Why are the Indian and Vietnamese government severely restricting the operations of their private traders by banning outright the export of rice. They want to get back in control due to the inflationary sruges in commodities.

    hmmmmm…..do you now believe it does not matter if your for trade globalization or not, you will be affected by the turmoil we are currently in? why blame our government then?

    You want to play with the big boys you have to have the moxy and means to dance. Sabi ni Glo na the country is well placed in the global market. Competitive daw !!!!Ayan, itong malakas na hangin at maski si Big Mike tagilid.

    again, we have implosion in the commodities market after many years of relative calm, here you go casting blame on the government. Even if they’ve foreseen this, its not like they can just flick a switch and it will turn around just like that. Plays by option traders usually are short term and hopefully the artificial price increase will abate. I believe its too early to say “i told you so”

  2. Bencard

    “didn’t anyone telegraph that? or was the Indonesian govt discreet with their order compared to the loud mouth phil govt the reason why we have this global crisis now.” grd

    can you imagine if the phil govt did not not announce it? the omnipotent “media” will have a frenzy with all speculations of venalities and conspiracy theories. as surely as the sun rises in the east, some mcarthyiest senator would pompously deliver a privilege speech, name some lozada or guce-type “witness”, and the eager-beaver blue ribbon committee, with its forever-grandstanding members, will have another grand show for abs-cbn.

    again, damn if it does, damn if it doesn’t.

    btw, why should the “global crisis” be blamed on philippine’s importation? we are no more to blame than a father buying an extra sack of rice or two to ensure supply for his family. of course, he contributes to the overall demand, albeit in an infinitesimal way.

  3. grd

    can you imagine if the phil govt did not not announce it? the omnipotent “media” will have a frenzy with all speculations of venalities and conspiracy theories… bencard

    but bencard, that was exactly the reason why gloria did it. to divert the attention from the zte-lozada controversy.

  4. Bencard

    grd, but why is there a need to divert? do you really think the senators would stop the ztn-nbn “inquiry” for any reason if they could “produce” solid and reliable “evidence” of gma’s involvement?

  5. Bencard

    grd, (btw) following your theory, gma should have kept it a closely-guarded secret, then have someone leak it to media with hints of scandalous activity, right? but, oh, she announced it, and down the drain goes you diversion theory.

  6. supremo

    ‘to divert the attention from the zte-lozada controversy.’

    I also said this in a previous thread. GMA sriously miscalculated the rice situation or she was absent when the law of supply and demand was taught in economics school. Can someone get GMA’s grades in school? Did she take economics or home economics?

  7. grd

    bencard, my reply to you? hehehe. i say, your wisdom is failing you. i’m surprised until now you haven’t got a clue about the tone of my comments. maybe it’s because i don’t put smileys on my comments as what benignO usually does. but ever heard the word “sarcasm”? 🙂

    or i’ll give you another hint. i’m for common sense and fairness.

  8. Bencard

    thanks, grd for the clarification. i was just concerned that some impressionable minds, like supremo’s above, will use the “sarcasm” for hate-gloria rhetoric (lol).

  9. grd

    Thailand Crisis is surprised to hear the Thai Prime Minister exhorting the people to eat less so that Thailand can export more rice.

    is there outrage over there?

    our agriculture secretary suggested fast-food restaurants should serve less rice to costumers and he was “crucified” as mlq3 wrote.

  10. leytenian

    jackast,
    “Planners, both in government and corporate planning, have been spoiled by the OFW remittances. They have relied so much on the yearly $15 billion contribution to GNP to keep RP afloat.”

    true

  11. TonGuE-tWisTeD

    To verify if there’s really a shortage or not, all that one has to do is go to the local “palengke”. Just yesterday, I saw two whole row of stalls full of their usual inventory stacked in the back as are the wooden display box containers. Only one compartment is empty – one that says “NFA Rice”.

    One stall however had 2 very long queues in both directions snaking all throughout open aisles, I’d say about 200 people, tops. I saw a neighbor who later told me that he got a text message from his “suki” that he will be selling 15 sacks with a 3kg-limit per buyer for P18.50 a kilo at 10AM that day. I was in the market at 7AM.

    There IS a shortage of NFA rice (or “NPA rice” as one sourgraping stallowner called it) while the other varities priced from P31 to P38 have no takers.

  12. leytenian

    TonGuE-tWisTeD :

    our country receives AID from United nation and other countries. you are also right about the 15B or $? overseas remittances that our government rely upon. My point, our leaders will wait for things to happen because of entitlement mentality or dependency?

    So now my question? Are we really an Independent country?

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