As chronicled by John Markoff in one essay in “The Rise and Fall of the French Revolution (Studies in European History from the Journal of Modern History)” (University of Chicago Press Journals) “ the Great Fear was paranoia in the rural areas, as a political crisis engulfed France in 1789. Rumors began to spread that the King, bandits, merchants, what have you, were going to swoop down on farmers to take their grain. The farmers formed militias; urban residents panicked. The government panicked.
We are experiencing our version of the Great Fear. A vicious cycle involving dramatic moves by the government, magnified by a media out of any really big stories (NBN-ZTE, Spratleys, etc. all fizzled out by Holy Week) and the combination of the two brought out panic combined with opportunism on the part of the public. Its early glimmerings were reported by Bong Austero in his March 24 column, Averting the impending rice shortage.
Yesterday, the Inquirer editorial, Hoarding, pointed to the Great Fear among local governments (For background, see: Davao will hoard rice, and Bumper rice harvest expected in Mindanao and Govs of provinces in Panay say rice enough for Visayas and Panay has enough rice to feed entire Visayas and
My Arab News column for the week is Fixing the Rice Problem Leaving Others Unattended. Since the modern presidency began, presidents have obsessed about rice: and cultivating rice, literally, has been an image eagerly cultivated by our presidents. See The Presidency as Image, in the PCIJ.
In my Arab News column, I pointed to inflation as one of the unattended problems, and to get a better view of that problem, and other related ones, see this analysis in Global Property Guide: Gloomy days ahead for Asia’s housing markets. Two charts from that analysis are particularly relevant:
The in-house economist of Global Property Guide, Prince Christian Cruz, was the guest on my show and he had some interesting things to say. The rising price of oil last year already put pressure on income, but was offset by the appreciation of the Peso. However, with the rise in rice prices, Filipino families have been subjected to a double whammy and thus, rising inflation. See also Gov’t to cut growth target for 2008 Rising food prices to curb GDP expansion.
Government data says the top three expenses of Filipinos are food, transport, and rent (more or less in that order, but food always being at the top, and ranging from 40% to more than 50% of income expenses), so a rise in oil and rice prices bloats the three, and from his perspective (focused on the property market) this will mean families have to consider moving to cheaper accommodations or defaulting on their housing loans; and that’s only from the point of view of the domestic economy. Add to this a downturn, economically, overseas, and the problems increase, as Filipinos overseas have to set aside purchasing homes (which fuels the construction industry) as their families at home have to spend more for food, transport, and rent…
The other week, I asked a worker how prices had been affected since Holy Week. A serving of vegetable viand went from Php15 to Php25, for meat dishes, Php30 to Php40, a cup of rice from Php7 to Php14.
People have had to adjust their grocery budgets, which up to now had been fairly stable for a few years. See Opinionated Banana:
If UN has an emergency food summit, well our Household also had our own emergency food summit. My mother, who’s in charge of the hardcore accounting and shopping shared that before a sack of sinandomeng rice would just cost at around 1,400-1500 pesos, but as soon as the crisis hit the fan, she ended up paying for 2,000++ pesos for a sack. With just a couple of male species and one diabetic in our household, we’re really not dependent on rice. But still, it calls for attention. We would experiment now on mixing food viands with mashed or baked potatoes, which I’m looking forward to, or develop our skills with cooking pasta. Yes, we’d still cook rice, but in smaller quantities now. It may result to healthy and positive effects, just as long as rice is still an option and not a form of deprivation. We’re all willing to adjust.
This leaves less money for the various service-oriented businesses that rely on people having disposable income. So the immediate problem, for now, is it’s not that there’s no rice to be had, but that purchasing rice is more expensive and won’t be going down in costs significantly in the long term. And we aren’t creating the kinds of stable jobs we need.
A backgrounder on where we were, prior to the Rice Problem hogging the headlines.
From Cielito Habito, PDI Talk.ppt and Michael Alba, economic briefing.ppt (see also philippine economic growth revised.pdf” I’ve snipped some slides. The white ones are from Alba, the colored ones, from Habito.
In 2006-2007, both were looking at the growth taking place in the country (being proclaimed as a new Golden Age by the administration, if you remember) and pointed to where it was really taking place, and where it wasn’t:
Alba had been pointing out that productive land was being lost to the booming property market, and what was worse was government wasn’t even properly keeping track of the development. Both he and Habito were also pointing to the dangers of lopsided growth, since the sectors growing weren’t labor-intensive (Habito pointed to the collapse in manufacturing-related jobs) and a fall in domestic investments, which would be magnified by a fall in foreign investments.
See also The Grand Deception by Perry Diaz. He calls the Palace to task for trumpeting its economic record, and how it brushed aside questions concerning the statistics and where the growth was taking place. He also zeroes in on smuggling as one issue that has hounded the administration -and which, I think, explains why public skepticism has hounded its every move in attending to the Rice Problem. In Thads Bentulan’s PPT, there’s a footnote (see the notation with the asterisk, below) where he raises the question of smuggling, because there’s a gap in the official statistics:
This actually came up during the Senate hearings before Holy Week, but the vacation prevented people from focusing on it. The discrepancy was between what the Philippines claimed was the value of its trade with China, and the values China itself declared. The Philippines claimed something like 8 billion dollars in trade while China said the value was 30 billion dollars. Immediately, during the hearing, some senators began asking if the discrepancy wasn’t a sign of smuggling. Although one senator later explained the discrepancy could be a case of arguing apples and oranges: the Philippine figure may be trade with the People’s Republic of China only, while the China figure may be “Greater China” including the PRC, Hong Kong, and Taiwan (and even the Binondo traders) but also revelatory of “technical smuggling.”
As it is, the rise in rice prices has led to demands for salaries to be raised, see Hefty wage hikes to spell economic troubles for RP–bank. Even the Inquirer editorial warned of the consequences of government allowing itself to be stampeded into raising wages: see Immediate need.
Which brings us to my column for today, which is Rice per minute. It discusses Thads Bentulan’s provocative An Analysis of Rice Prices in Three Countries: Hong Kong, Singapore, and the Philippines (as of April 20, 2008) . You can also download his Hyperwage Theory book.
People in business immediately dismissed Bentulan’s proposal: if it were adopted, one person texted me, “jobs will simply disappear.”
Bentulan says the minimum wage for a domestic helper in Hong Kong comes out to 18,637 Pesos per month. Ask yourself what work or position would pay a similar salary in the Philippines. Many people I encounter who are business owners complain that there are lots of jobs available -only, there are no Filipinos qualified to fill those jobs- but you have to wonder, the jobs remaining unfilled (mid-level managers, bookkeepers, etc.) are at salaries that makes it a competitive choice for a qualified person to seek employment overseas.
Moving on to the politics of it.
There is a novel by Carmen Guerrero Nakpil, which appeared in 1990 but has a strangely contemporary ring to its title: “The rice conspiracy: A novel”. What is interesting to me is how students from the UP School of Economics on my show last Tuesday asked if we really had a rice crisis or if it was a politically-manufactured scenario. They are not alone in being suspicious, see The Multiplication Table of The Jester-in-Exile from April 10:
My suspicion is this: the “rice crisis” is a fabrication, a scare tactic to draw attention away from the assaults on the squatter in Malacanang. With the public focused on this apparent rice crisis, the media will spend very little airtime on the motion for reconsideration that the Senate has filed with regard to Neri vs. Senate, on Jun Lozada and his plummetting visibility, on Atty. Harry Roque and the Quedancor issue, and the Magdalo officers’ conviction for coup d’etat, among other things.
Heck, I’m fairly certain that this rice crisis issue will be milked for what it’s worth, and then the public gets blindsided by yet another impeachment complaint decide to shield GMA.
This was tackled by Mon Casiple in Rice politics and governance:
Of course, it has been a policy of the government for sometime to import rice directly as the sole importer. In theory, it is supposed to sell the imported rice to small retailers directly. In practice, it is the cartels — with connivance from corrupt government officials — who divert these into their own control. A variation on this tactic is to substitute imported high-quality rice with local inferior rice.
The connivance — if not the direct hand — of government officials in rice smuggling from NFA warehouses is underscored by the dearth of direct rice smuggling from abroad. Somebody or somebody’s group is making a killing on the supposed “rice crisis” and the expected panic which drives prices still higher.
In the medium- and long-term, there really will be a rice crisis, as well as a general food crisis globally. At the same time, global rice prices will continue to rise as rice-producing countries increasingly curtail and secure the need of their own population. A lot of factors also contribute to this, such as high population growth, slow scientific breakthroughs, climate change, and higher per capita consumption.
However, in the Philippine case, a major factor is the short-sighted government policy definition of food security as consumer-oriented securing “food on the table. This policy contradicts the common-sense notion of securing your staple food through sustainable production. The illogical policy of tolerating population growth when it outstrips resources complements this disastrous rice trader-friendly policy. Failure to complete the land reform program and prevent land conversion schemes of prime agricultural lands also contributed their share to the government’s failure in achieving real food security.
P43 billion is a drop in the bucket and a palliative when seen against the backdrop of governance failure by successive administrations in the rice and food sector. The GMA administration shares some eight years of it.
Rice, rice everywhere — but not enough to eat, says a news article. Ricky Carandang, in Why Rice is So Expensive, says an overlooked factor is manipulation of the Futures Market in foodstuffs:
As all this hot money goes out of the US, fund managers are looking for other places to put their money. And they’re going into commodities. They’ve seen how oil and precious metals have gone up and continue to go up. But with oil and gold hitting record highs, there’s a sense that the upside may be limited so they’ve focused on commodities that they believe could have a greater short term upside. And that means corn, wheat, soy, and rice.
Yes, there are real supply and demand factors driving up rice prices, but one must concede that a big chunk of the increases in the prices of oil, gold, and rice, are due to speculation on the international commodities markets.
As it is, in Cebu, at least, Rice prices start dropping. The decrease in prices being due to decisions by the traders, it seems, and not because of government’s intervention!
Frisco Malabanan, director of the Ginintuang Masaganang Ani (Golden Bountiful Harvest) Rice program, said that as of Tuesday, farm gate prices of wet palay in Nueva Ecija have been monitored at around P14 to P14.50 a kilo.
He said that commercially, this farmgate price should translate o about P30 a kilo of milled rice, lower than the current prices, which have been hovering around P32 to P34 a kilo.
Malabanan attributed the low farmgate prices of palay to the decision of traders to stop buying in the meantime.
“This may be a strategy for them to bring down prices of palay,” he said.
Some things on the chart above taken from The Rice Problem site: the wide disparity between the farmers’ price (light green) and what the wholesalers’ sell it for (orange); and the relatively small margins of the retailers (light blue).
The wholesalers, though, also need that wide margin because it represents the inefficient costs of distribution in our infrastructure-challenged country. But it also shows the opportunities for maximizing profits, for example, when NFA Rice is then mixed with commercial rice or repackaged entirely by wholesalers and retailers.
Back in April 9, Philippines Without Borders warned that since government, by its nature, is slow to act, by the time its policies actually start having an effect, it could screw up what should at least be a bonanza for our farmers:
Now, based on Business Mirror reports, its seems Malacanang is simply telling the private sector to import what is allowed under the minimum access volume (MAV)…. Crazy!
The fact is that the MAVs have been there all along and no one dared importing much lately simply because tariff is high (50%). Who would be encouraged to import rice that are already expensive in the world market and pay 50% on top of it, thus making the landed ones so expensive? If I’m the importer, I’ll wait for local prices to really move up the heavens before I even thought about availing of the MAVs. That’s what is happening now.
So the supposed policy pronouncement about “allowing the private sector to import rice” was a bogus one – a deception. Or probably it was real, only that government, as usual, simply backtracked, nay backslided. My goodness! Now, the private sector is saying they will only import rice at zero tariff, and given the government’s very slow decision making process, we might end up having those imported rice landing our shores when the farmers are already harvesting their palay. Some of them has actually started harvesting now. That will be tragedy.
Another matter.
We shouldn’t discount, too, as the effects of people being able to game the system, as smoke points out in Malthus got this one right:
You see, some well-off families have been gaming the system. When you reach a certain income bracket, people eat more often at restaurants than at home. For these people, the rice they buy is mostly for the house-help and the pets. Ironically, in the circles I know, these are also the largest purchasers of cheap rice. With most of these upper-income families employing at least two – up to six – house-help, they are able to buy more at those street side selling points.
First thing they do is they go quite a distance from where they actually live. When they find a selling point, the helpers line up with everyone else, only they are spaced about two-three people apart. Most of the time, they’re not noticed as strangers. But when they are, they just say they’re from so-and-so depressed community and that that place ran out of rice. They then give the sob story about having had to walk or travel far just to find rice. It’s clever, really. This story reinforces the notion that there is a shortage, and sets people a-twitter. In short order, they forget that their are strangers among them.
Once they get their quota of cheap rice, these helpers walk walk walk. Eventually, they all meet up, get in the re-conditioned van they use for going to the market and drive on home.
People would go to localities where NFA rice was being sold, even if they’re not from the area and not necessarily the target market of rice relief -the idea being a habit as old as the Japanese Occupation, which is to hoard when things are cheap and simply pull one over the authorities.
Roving rice-buyers aren’t just agents of the well-off. This is where having many family members -and idle ones- comes in handy: you can line up, anywhere, even far from home; and when supplies are limited per person, multiply the number of persons and you multiply the family’s total share. And the strategy is validated by events: even mentioning that the NFA may be forced to raise prices increases the determination of people to hoard now.
Politically, whether manufactured or not, the Rice Problem affords as many opportunities as it presents risks. See Manila’s Arroyo treads risky path with rice campaign. Amando Doronila takes a dim view, saying that Low credibility bodes ill for Arroyo riding out crisis. I’m not convinced the public mood will sour the way he thinks it will, or could. Definitely, as Mon Casiple says, in Malacañang 2010 hopes, the Palace will be sniffing around for opportunities -or trying to create them, as RG Cruz amplifies in an entry. Or, simply try to move fast to take advantage of any that may arise; more so, if it can claim credit for heading of an emergency. House to call Yap on P250-B plan setting the stage?
The Warrior Lawyer has a trilogy of entries, starting with The Politics of Rice then Rice Crisis Relegates the ZTE Broadband Scandal to the Background and On Corporate Rice Farming and Other Notes on the Rice Crisis . Which brings us to issues raised and some readings.
I. Government agricultural policy
Rice: a policy blind spot says Randy David. On the National Food Authority, see Soaring World Food Prices Exacerbate Challenges Across Asia… Especially in the Philippines in the Asia Foundation blog. See also The Bottom Seed: Notes on the Philippine Rice Crisis by Martin Perez.
See Bohol rice farmers ‘forced to eat camote’:
Catarata said that in planting rice, farmers need to spend for one hectare at least P18,745: P900 for the rice seeds, P6,000 for 14-14-14 fertilizer, P4,900 for urea, P30 for the transport of fertilizer and P500 for chemicals against pests, and P6,415 for labor.
Catarata said that if the P1,080 for thresher and blower and P1,800 for irrigation fee is added, the total rice production cost of P21,625 will be shouldered by the farmer, who is able to harvest only 60 sacks of palay worth P28,800.
Because the farmer has to share one-fourth of his harvest, equivalent to P7,200, to the landlord, he stands to get only P21,600 as gross income. After deducting the production cost, she said, farmers end up with a loss of P25.
But this situation can only be compounded by what Ellen Tordesillas says is a Looming fertilizer shortage.
See also P5M full subsidy for rice farmers and Herrera proposes full subsidy of rice seeds.
II. The World food situation
Earlier, Food crisis grows by Paul Krugman and then from Time.com: No Grain, Big Pain. From the Asia Sentinel, recently, Will Rice Depart from Asia’s Tables? The region’s most important food staple may be going into permanent decline.
See RP may not be able to secure more rice from East Asia.
See Wal-Mart’s Sam’s Club limits rice purchases.
III. Biofuels
See Let Them Eat Bio-fuels by Tony Abaya, and Biofuel not to blame for loss of rice lands — senator. He’s right, I think -but there’s the question of corn (and inefficiencies: it’s cheaper for hog raisers in Luzon to import corn from Thailand than to ship it in from Mindanao), which is being allocated for biofuel production.
The Arab News editorial, International Problem, says European farm subsidies have been very successful and advocates some sort of international body to manage subsidies for agriculture on a global scale:
Biofuels are not the root cause of the price hikes; they and the high price of oil are simply the straw that broke the camel’s back. The real villain is the phasing out of subsidies in so many parts of the world at the behest of the IMF and the World Bank. More land has been taken out of food production as a result than any shift to biofuels. It has hit poorer countries particularly hard because they are the ones that have most needed IMF and World Bank support. Without subsidies, farmers in countries such as Ghana or Gabon – West Africa has been particularly affected – could not compete against cheap imports from the big producers, and gave up. But no one realized a crisis was brewing because cheap food imports continued to arrive. It is only now, with prices rocketing, that poorer countries find they do not have enough local producers to fall back on.
Then again, we can focus on growing meat without having to grow animals -see Tastes Like Chicken in Slate.
IV. Population
See Juan Mercado’s look at population from a regional perspective in 2010 dividend. And Manuel Buencamino’s Earth Day blues. Blogger smoke is also in Malthusian mode in C-rice-is.
And finally, a brief survey of the blogosphere:
April 9: see: The Left Click, Arbet Loggins @ Multiply, Life As I Know It and The Unlawyer. A particularly interesting look back at previous rice problems in A Simple Life:
In the slums of Iloilo City, circa middle of 1970s, back when the NFA (National Food Authority) was still known as the NGA (National Grains Authority), “NGA” was synonymous to an inferior variety of rice — dark-grained, 50% broken, and had a chemical-like smell.
Therefore, I am surprised that unscrupulous traders nowadays can repack NFA rice, which retails at P18.25 per kilo, and pass it off as commercial rice, now selling at up to P34 per kilo as of posting time.
As a child, I remember Nanay occasionally taking home with her a brown paper bag containing a ganta (about two and a half kilos) of NGA rice. Those were hard times. Those were the times when Ferdinand Marcos rationed rice to just a few kilos per family.
A few months into the oil-rice crisis of the 1970s, the NGA resorted to rationing rice mixed with corn grits. Although the yellow corn grits-white rice grain mixture looked good, either cooked or uncooked, swallowing it is another matter. The discriminating Ilonggo palate just does not have the tolerance for corn as the staple. We may eat corn during snacks — on the cob, steamed or broiled, or as popcorn, but not when cooked as rice.
I did not remember exactly how long the corn-rice blend lasted in Iloilo, but I can still recall that the Ilonggos did not enthusiastically receive it. We survived and outlasted the rice crisis by subsisting on “binlod” (Tagalog: binlid) — 90 to 100% broken rice grains. Normally, binlod should be chicken feed, but undoubtedly, it fells better on the palate than corn-rice. Binlod is best eaten as “lugaw” or porridge. Sometimes, Nanay would be lucky to obtain some “laon”, which was only slightly better than NGA rice, and we would feel blessed.
Yes, we survived the rice crisis then and we can survive it now.
April 10: see Every man is guilty of the good he did not do…Voltaire, Poolah, Daily Musings, mackybaka! , www.CCLozano.com and Prospect Avenue:
My mom’s having a hard time ordering rice right now. She said the price of rice has risen twice over the week. She’s called all her friends and our relatives. One is selling a sack for 1,500 pesos, our aunt (who owns a stall in a public market) is selling hers for 1,800 pesos. Rumor says that a sack would cost 3,000 pesos in a few week’s time.
I don’t think there is a rice shortage at the moment. People are just getting greedy and hoarding the sacks out of greed and paranoia. It’s mass psychology at work. The rice crisis is a self-fulfilling prophecy that is slowly coming true.
Mom’s thinking of sending our workers out to buy NFA rice. It’s cheaper (18 pesos per kilo versus 35 pesos selling in the market). But you have to line up pretty early in the morning (around 5am) to buy the rice (shop closes at 10am). Each buyer can only buy up to two kilos of rice. There are cops (or soldiers) standing guard, making sure that everyone gets a fair share of the NFA rice.
April 11: see Splice and Dice:
That is the part where a morally bankrupt regime purports to be the moral buttress of the nation. That is the part where a Garcified leadership pretends to wrestle with the liars, cheaters and thieves in this nation when that leadership has nobody else to wrestle other than themselves. That, too, is the part where a gloriafied regime sees everything else as investments, owing largely for its economic eye, while failing to understand the basic difference between what is legal and what is just.
I’ve always believed that what is legal does not necessarily equate with what is just. While we may have laws, and we do have laws, there remains the sweeping thought and feeling that we lack justice. Invoking an executive privilege may be legal, but does it bequeath us any justice? Well beyond all that there is to be truly disappointed about, sanctifying that executive privilege, one which has truly become a privilege in the strictest sense of the word, by the prostitutes of the law corrodes the fists of justice. It’s a case where a distorted defense of a privilege which the constitution does not even explicitly provide tramples upon the written forces of truth and transparency, the gravity of which pins us back to a crisis worse than one plaguing our rice supplies.
I might add, we too here have seen the price increase by $2 for a 10 kgs. bag and now cost an average of $15. But retailers, mostly Chinese Busissmen do not take advantage of the impending shortages, but some instead absorb the loss for the time being for the scare of losing the customers..competion is stiff for overall Oriental Groceries and rice is just a minor part of it..
Really? who said so?
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/04/24/BUUR10AOLH.DTL
Bencard,
Can’t believe that anti-GMA could blame GMA for the rice crisis.
Are they wearing colored glasses or they don’t read global news?
http://money.cnn.com/2008/04/25/news/food_crisis.ap/index.htm?cnn=yes
Some businessmen are making bets that the rice shortage and price spike will last beyond the June harvest. I heard DA Secretary Yap say that warehouse and storage facilities not anyway connected with rice milling & trading (e.g. hardware, lumber, etc.) are being used to hoard the food staple.
Better buy your construction materials now before there is a shortage in them too.
Folks,one practical advice:
“If I had to sum up my practical skills,I would use one word:SURVIVAL” George Soros
So the global rice crisis is also an attempt of every government of countries where it is mostly felt to cover up for political issues ?
cat, some americans think so.
http://counterpunch.com/quigley04212008.html
but of course that is from a particular left-oriented point of view.
in http://www.rgemonitor.com/index.php
you may find the links mentioned in its recent issue newsletter:
The freely available on rice being
http://www.rgemonitor.com/blog/economonitor/252507/
which points to several factors, at least two of which (biofuels and land use policies) are programs of the present government. the falling dollar is another factor, according to the report.
“Think globally, act locally.”
Some of our planners lacked “glocal” planning.
i am referring to India, China and other Asian countries.
US’ problem was not about rice. it is about rising farm prices despite the subsidies.
The Cat on, “Really? who said so?”
Unless you count yourself in California complaining about the price of rice even you can afford it.
http://counterpunch.com/quigley04212008.html
thanks for link, manolo
Cat on, “Can’t believe that anti-GMA could blame GMA for the rice crisis.”
It is valid since she is the President, the Philippines has the premier rice institute, the country had been an exporting rice country until Senator Arroyo who became President had been turned into top importing rice country and she is economic doctorate who knew her country’s land are largely in agriculture, plus she used the recovered Marcos loot under Agrarian Reform fund to finance he 2004 elections. You won’t understand Agricultural neglect until the country is hit with rice problem together with other countries. If we are exporter, then you have different picture.
the president is blamed for every ill that happens in the country, why not the price of rice? if a real tsunami hits the philippines, guess who’d be blamed?
Bencard – real tsunami did not hit the Philippines and the President ran the country.
dOdOng: I think what Ca t says is that GMA has nothing to do with the crisis brought about when Thailand, India, Vietnam others began limiting the volume of rice that they make available for export. What you can blame GMA for is (continuation of old practice of) neglecting of Pinas’ farm-to-market roads and irrigation. [But you can’t blame in a vacuum. I wish someone does a masters degree thesis, I actually would like to know how much better Pinas will be now if the money for C5 or Clark-Baguio highways were instead put into irrigation or more farm-to-market roads.]
She is PROTECTIVE of the Philippine farmers — that 50% tariff on imported rice in place last year and the year before is a huge shield to protect the local farming industry. Of course, that tariff is like VAT. The 50% tariff means cheaper rice from USA, Thailand and others were not made available to Divisoria and Quiapo markets or to Tokyo-Tokyo and various restaurants.
And do not stop with blaming the Executive Department because it is still rampant — corruption (patong and kotong) in high-, mid- and low-levels of government.
Here is the FEAR:
Commenting in the Philippine Daily Inquirer, Senator Loren Legarda warned: “Rice is an extremely sensitive political commodity. There is no question a surge in the staple’s price is bound to spur social unrest and political instability.†Already under siege over other scandals, Arroyo is desperately implementing stopgap measures to try to avert an eruption of popular anger.
Bencard is trying to blame rice inflation to global crisis. Partly true but economic risk can be calculated, analyzed and predicted by experts. Our experts are our leaders. But they are not true experts. Their expertise is to think how to move funds from one account to another without getting caught.
Economic risk can be prevented. Rice Inflation should not even be a problem in our country. Another obvious failure by our current admin.
UP on, “I think what Cat says is that GMA has nothing to do with the crisis brought by….”
It easy to blame it on global prices. If you are exporter like we used to be, the soaring price is a boon and your domestic rice price is not affected. The political decision to be importer instead of exporter, given we have huge tracts of lands in agricultural sector is by the President. Because of that political decision by the Economic Doctorate President, the Philippines is the largest world importer of rice today.
The President cannot do all the jobs of calculating,analyzing and predicting risk. Department of Agriculture could have made solid plans long time ago. Our executives comprise of ministers in charge of their areas of expertise.Our Senators, Congressmen and Governors are in charge of their respective region and should have been able to assess availability of land for agriculture to balance supply with each own population demand. All of them are paid to do the job to coordinate with one another. Obviously… majority coordinates and meets for money. Therefore. we should focus on where is our money. Each of them must be accounted for.
But a president must be able to lead among her team. Obviously, she doesn’t know what business are we in. Importer or exporter?
leytenian: I don’t think there are enough accountants among our senators, congressmen, governors and ministers-of-this or minister-of-that.
Now, Manny Villar, by my book, may be the strongest of the Very-Interested-to-Succeed-GMA. Villar should have a stronger accounting background than, say, Ping Lacson.
Leytenian – when corporate growth turn south, the CEO is fired. There is no ifs and buts because your sales department is slow or financial analyst is wrong in forecast. Besides the CEO has all the resources at her disposal.
leytenian, “Obviously, she doesn’t know what business are we in. Importer or exporter?”
She does, remember she has doctorate in Economics. Being an importer is a low cost solution (less cost of importation vs. longterm investment on agrigultural infrastructure and farm support) if and only if the global prices are stable.
One has to admit, benign0 will not seem to run out of material to use to support his thesis — cultural flaws of Filipinos. The Inquirer editorial titled HOARDING ends with:
true, i agree but she has a doctorate degree and is the president. Risk can be calculated and predicted. She again fails to see our future. Or maybe she relies too much on the 7B dollar yearly overseas remittances as easy cash flow? An entitlement mentality just like my little brother who expect me to send money? oh well the dollar is falling and I cannot afford to send the same.. smiling. I told him to plant RICE… LOL.
SO she is also guilty of having rice crisis in India, in Haiti.
PAki exercise nga ang utak ninyo. Duh.
global CRISIS.
At kayo alam ninyo? Sus.
“Rice is an extremely sensitive political commodity. There is no question a surge in the staple’s price is bound to spur social unrest and political instability.
This has been warned by the United NAtions.
Huli ba kayo sa balita? Magbasa naman kayo ng ibang newspaper other than Inquirer.
Global prices are not always stable even our jobs are not stable. Savings and other investment must be added to prevent risk. Very simple. it doesn’t take a genius or a doctorate degree to understand economic fluctuations and unsustainability.
In terms of calamities, an insurance will cure the risk. Insurance in economics is money reserved allocated for that purpose. Hospitals and medical professionals should be trained for such calamities.
Easy said than done…we do need revenue or money to finance all these. We are still poor because we spend it unwisely. Worst.. we don’t know where our government revenue goes.
Wow an economic technocrat. How so? Never mind, rice inflation? Say what?
the Cat,
I will not see a thing if I don’t know. I do have my own opinion and knowledge but it took me 4 years to read. So many things to share so little time. My point, she is the President and we are paying her salary to do the job therefore we expect her to do her thing.
Try hiring an employee and see what would you do if she/he cannot perform the job. Keep her/him or fire?
The President has her economic team as well as security team. She knows what is going on. Actually, we do have enough supply. I have families in the provinces, the rice supply is largely stable. There is just too much noise when the local prices spike fueled by anticipatory response to high global price and limited world supply combined with local hoarding.
As long as the government goes offensive on local distribution so the cheap NFA supply reach the intended consumers and go after hoarders and speculators, then the fear of social unrest can be averted.
Ano raw?
The cat, “SO she is also guilty of having rice crisis in India, in Haiti.PAki exercise nga ang utak ninyo. Duh.”
That is your statement, not mine. So it speaks of your “utak”. Duh
The Cat, “Ano raw?”
She speaks of government wastes. hehe.
Bye, I have to go.
dodong,
LOL… hahaha..have to go too. Bye The cat. take care
leytenian: On your little brother who asks money from you. Send what you can afford, and also send the message — be sure to tell him to earn it. If he is a student, then every grade C or higher gets X-dollars, with a 10% bonus for every A. If he is working-age, then tell him he gets zero from you if he makes below P36,000 a year; that he gets X-dollars if he makes P36K to P60K a year; that he gets X-plus-Y dollars if he makes over P60K a year (so the more he earns, the more he gets from you).
a string of ph’s in economics from the best schools in the world would not empower anyone to guaranty continuing prosperity, or to know what will happen 3, 6, or 10 years down the road. if so, there would not be bull and bear markets in wall street. policies are made and pursued with a prayer that they would deliver the intended benefits to the economy.
the philippines, a copycat country by tradition, thought as early as the 50’s, that industrialization was the key to progress and prosperity. for many years up to now, land use has been re-directed in such a way that vast tracts of forest land (classified as alienable and disposable), and developed agricultural lands were converted for industrialization and commercial development as well as for residential uses. even some permanent timberlands did not escape re-classification and coversion. it’s kind of hard to admit that the number of filipino rice farmers, like catholic priests in america, is rapidly dwindling. the old farmers are not being replenished by young ones in sufficient quantities. most of the latter want to live in the cities and work for mandated minimum wages, or become ofw’s and risk abuse and maltreatment by foreign “masters” for a pittance.
in the context of the looming global food crisis, a re-emphasis on agriculture needs revisiting. government resources must be allocated in a manner that would encourage food production and distribution that could meet the needs of a burgeoning population.
“In terms of calamities, an insurance will cure the risk. Insurance in economics is money reserved allocated for that purpose. Hospitals and medical professionals should be trained for such calamities”
Just a question or two, in social security services all you can get is a calamity loan,how can insurance cover these? I know in some credit card companies you are allowed an emergency credit line increase during such calamities,but still you got to pay.
How can hospitals help in calamities other than,helping those involved in accidents, and the like? But as you said; so little time to share;you might want to clarify if and when you can.
I was interested because I think you wanted to say something more pero nabitin lang.
On real or imagined.
Not yet a sum of all fears scenario,but it is not at all imagined. As to the validity of my opinion;I won’t be the judge of that.
Off topic, the next doomsday scenario is lack of power within the next few years.
Sure we face it when it comes and offer quick fix solutions when it happens.
Due to quick fix solutions and some other reason, most power plants did not even anticpate that their plants needs a cooling system, which they can get from the sea the sameway ships do it.
If we cannot do that with our power plants now, then why even consider going nuke,when it takes a hell lot of cooling and use of sea water.One more thing ,there is no way you can expedite nuke tech.
Same opinions on the dams raised by UPN and the otheres.
UP n student,
“I don’t think there are enough accountants among our senators, congressmen, governors and ministers-of-this or minister-of-that.”
I agree but what ‘s the use of our Commission on Audit. Obviously they audit their own.Might be that the commission’s intention is not to publish or transparent.The public still don’t know actual breakdown of expenses. Are we also wasting labor cost for this department?
Regarding sending money to little brother.It was just an example. It was not personal. My brother have not asked anything from me. He works like me and you. Thanks God.
mlq3, excellent post regarding the rice crisis. its well balanced in taking account all the different scenarios on the root cause of the problem.
my 2 cents, just recently the price per share of equities and commodities were determined by their inherent value calculated painstakingly by market analysts. in the last few years the fundamentals behind the value of such financial instruments have decoupled at least in the short term driven by greed of market speculators armed with billion dollar portfolios. The manipulation is through the increasing use of option, momentum, sentiment, market timing, and technical trading in wall street. This has greatly contributed in the volatility of the commodities market where grain prices can skyrocket with no real shortage.. i believe that this modern day gamblers should be regulated, so not to adversely affect poor nations like us.
I don’t agree with the quoted statement below. As an international trader, we make it a point to know which clients will be in need of our products so we can start positioning ourselves in pursuit of a sales. In Philippine steel for instance, we always were on the lookout of National Steel’s blast furnace malfunctions so that we can offer more slabs. And in the event that we are the only supplier around, that means we need not bring the prices down that much.
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“Your president created the crisis for political reasons She caused the global price of rice to go up when she telegraphed how much rice she was going to buy.. Now with high oil prices driving up the price of everything she will have the problem of controlling inflation.”
KG,
nabitin nga… lol.
I was implying about other future risk that government might need to plan ahead. ( it was out of topic ) but anyway, i was talking about calamities that may happen such as typhoon or any of that nature that is out of people’s control. Bencard mentioned about tsunami’s hitting Philippines but he wasn’t sure who to blame.
Financial Reserve and planning must be in placed in our system. Hospitals should be ready with emergency planning to accomodate such risk. Reserve means insurance for the people. Of course we can blame it to Mother Nature but “mother nature” nowadays can also be predicted and people can be warned. This remains to be the duty of our leaders.
If we are prepared by addressing the issue ahead, we not only solve short term problems but of long term. This can eliminate costly expenses that will affect the overall financial aspect of our economy.
Yes, it is easy to blame our Rice Crisis to what is going on globally. It is also easy to blame Mother Nature to all natural disasters that is going to happen ( knock on wood). This type of “blame†does not require a President, 24 senators and over 200 congressmen.
“This type of “blame†does not require a President, 24 senators and over 200 congressmen.”
My point… if i may say…irresponsible leaders who are overpaid with people’s money.
When it comes to rice, Gloria Arroyo’s mistake is at the level of fundamental, long-term strategic directions. Deciding to expose yourself to the markets is itself a conscious decision and not a ‘given’ so she is not just a victim, as her apologists would lead us to believe. She cannot weasel out by blaming the world commodity markets because it is precisely her neglect of food security that has allowed us to be at the losing end of that market.
We have to remember that FPJ, the candidate whom GMA cheated during the last Presidential elections had the right strategic priorities in terms of food security and protecting farmers.
http://www.bulatlat.com/news/3-45/3-45-karonnie.html
So this is not a simple case of a failure of governance in GMA’s part because she stole the Office from the very person who happened to have the right answers in terms of long term/strategic directions.
Assuming FPJ was elected president in 2004 (despite the ‘cheating’) we can’t be sure he would not have succumbed to entrenched interests considering the record of the politicans supporting him at that time: Maceda, Enrile, Angara, Sotto, etc., can we?
It will not take just strong character, but deliberate thinking and long study. Look at what happened to Erap? His ouster was was also his own making.
“…a prince should read histories, note the actions of great men and examine the causes of their victories and defeats, imitating those who have been renowned. ” Machiavelli
Jakcast, yes we cannot be sure if FPJ would have carried out his explicit promise to make Food Security as his Number One priority. However, we should credit FPJ for having the right priorities compared to a supposed PhD in economics who turned out to be strategically wrong.
We also have to remember that the reason we cannot be sure whether FPJ would have carried out his promise is because someone cheated him out of the Presidency, and that someone, had the wrong priorities to boot. In his column for today, Randy David accurately described the social function of politics…
Being illegitimate, Gloria Arroyo did not have the right to take such a binding decision that would render our masa more vulnerable to hunger.
The problem is that the Elitists in our Society, with their sense of superiority over the masa, thought that they have the right answers so they thought nothing of cheating the latter out of their right to choose their leaders. And then, when they make a mistake, they choose to deflect blame to outside forces. Well, in the case of food security, it turns out that the Elitist’s choice was wrong and the Masa’s instincts were correct.
I would hope that the elitists take this as a lesson in humility but i’m not counting on it.
Again CVJ, grooowwwwwwww uuuuupppp!
Patay na si FPJ, hayaan mo ng manahimik yung tao. Ano naman nag mapapala natin kung meron mang strategic ek ek si FPJ eh patay na yung tao eh. Maniwala ka namang idea nga ni FPJ yun. Meron lang nag formulate para sa kanya. Hindi masosolve ang problema eto kahit mag bumangon pa si FPJ sa kanyang libingan.