By; DONALD SEVILLA
PART ONE OF A SERIES:
A LOOMING RICE CRISIS
INTRODUCTION
To grasp the scope of any business especially those engaged in the trading of commodities, it is important to understand the dynamics of market forces and how they come into play.
To our country and to millions of Asians, rice is a staple we cannot do without. It is as much a basic commodity as it has become a political commodity shaping policy.
To every nation with a growing population food sufficiency is paramount. Every government must secure the right of its citizens to have access to food at all times. History has taught us that a hungry people are an angry people and a restive citizenry is a threat to a country’s stability.
Remember how the French Revolution started and how the seeming callousness of royalty to the plight of a starving population triggered its downfall? Marie Antoinette”s infamous remark of “Let them eat cake!” when asked about her reaction to the hungry masses who had to endure long lines just for a loaf of bread led her to the guillotine.
Similarly we find insensitive comments from some of our public officials who in an attempt to diffuse the situation, encourage people to eat “camote” and other rootcrops as alternatives to rice when asked to comment on our present predicament, not amusing.
While it may have an iota of truth to wean us away from too much dependence on our favorite staple and promote food sufficiency by finding alternative solutions, still it does not directly tackle the problem.
To address food security government must be on the same page as farmers, traders and consumers.It must be a whole of nation approach if we are to succeed.
THE RICE TARIFFICATION LAW
Republic Act No. 11203 or the RTL replaced the quantitative restrictions on imported rice with tariffs of 35 to 40 percent and established the Rice Competitiveness Enhancement Fund (RCEF) funded by the tariff revenues.
“By removing quantitative restrictions, we are able to address both the needs of consumers for a lower retail price of rice and use the tariff revenues to fund the RCEF and provide even more assistance to farmers with excess tariff revenues,”
While its intended purpose is laudable, it discourages rice smuggling among others to ensure a stable supply and does away with quantitative restrictions on rice import permits (IP) that are potential sources of corruption. Yet it is also susceptible to the manipulations of big business with deep pockets.
Greedy big businessmen hungry for more profit, can pool resources together and create a cartel/ monopoly to corner lucrative contracts and alter the flow of trade ,creating artificial shortages and economic conditions favorable only to them.
Why do you think did the price of onions spike to a ridiculously high level recently? This could happen to any commodity in the market if government regulatory bodies are remiss in their jobs and lack teeth to enforce our laws.
By the way we are not lacking in our laws and regulations, we just need to enforce them diligently. But how could we, when sometimes, authorities tasked to implement them are in cahoots with unscrupulous businessmen?
OTHER AGGRAVATING FACTORS
TYPHOONS AND OTHER CALAMITIES
As we are situated along the Pacific rim of fire and its typhoon belt, we are at the mercy of nature’s elements that adversely affect our agricultural production. If not for the many typhoons that come visit us each year, we coud fairly have a stable production output average yearly. But the torrential rains and mudslides brought about by these typhoons inundate our ricefields and damage our crops setting us back.
LAND CONVERSIONS DECREASE THE AREA OF OUR FARMLANDS
Pointed out as a culprit responsible for the lessening of hectarage dedicated to crop planting, creeping urbanization is a bane to our food security. Efforts to address a huge housing backlog create an imbalance that affects our agriculture. This is exacerbated by unscrupulous developers hungry for any available patch of land to suit their purposes.
LOST INTEREST IN AGRICULTURAL AND MANUAL WORK
The modern age has brought with it modern conveniences and introduced creature comforts like we never experienced before. It brought us the internet and various social media platforms that helped shape a generation’s outlook.
This has promoted awareness and excitement of city life compared to the drab rural living in the countrysides. The younger generation exposed to facebook and the internet have lost interest in farming and prefer jobs at call centers in urban centers.
Moreover in their desire to uplift the lives of their children through education, parents have unwittingly pushed children away from pursuing careers in agriculture and farming. But who can blame them? Farmwork which many see as a lowly occupation has not been profitable to lead us to our dreams.
HIGH PRODUCTION COST AND MINIMAL GOVERNMENT SUPPORT
As pointed out earlier, achieving a suitable level of food sufficiency is made possible only by a whole of nation approach. Farners, traders(businessmen) and government must work together for it.
Farm inputs and other incidentals must be kept affordable with government ensuring that there is a balance between profit and income that does not disrupt the supply chain. When inputs such as fertlizer are expensive, production costs increase and affect farmgate prices that trigger a domino effect that ultimately sets the final endproduct price.
If all the players in the supply chain are kept within a ” level of comfort” that does not disrupt the other by wanting more( greed) the consuming public reaps its benefits.
Prices become stable and everybody wins.Yet when adverse conditions arise and start moving prices upwards, government with all its regulatory powers must know when to step in and act quickly.
But before any such intervention measures are resorted to, government should play a proactive role in agricultural support. Farm subsidies and easy access to credit and financing for farmers must be carefully studied and implemented.It must address priority development areas not just through infrastructure like farm to market roads but access to affordable fertilizer, farm equipment and updated farming technologies.
All of these factors combined, determine our agricultural output. But government must always be ready and alert to keep everyone in check. With all of its powers, it is not true that government is helpless to turn the tide around.
While the President’s directive to check and inspect warehouses of rice traders and the imposition of rice caps on prices are steps in the right direction in the short term, government could do more.
All it needs is an honest to goodness, no nonsense enforcement of our laws. With a strong political will government can clamp down on erring traders and opportunistic players .
However, businessmen with deep pockets will always find opportunity in adversity. Even in the most difficult of times there is always the opportunity to earn more if one has the means and resources. But a strong government creates an impediment to economic opportunism.