Although Rice Stocks Remain Adequate, Its Rising Cost Will Create Many Problems to Pinoys

THE era of cheap food that the world has enjoyed for the past decade at least is over. In the past few months, food prices globally have risen by an average of 40 percent, economic watchers and analysts say.

Rice, the main food staple in the Philippines and most other countries in Asia, is experiencing a tightening of supply and most of producing countries are beginning to restrict its export. The Philippines has had to import rice for many years now since local production has been growing slower than demand.

In past weeks, the prices of commercial rice varieties have been rising steeply, forcing many to turn to the lower-priced stocks of the National Food Authority (NFA). The result, particularly at the National Capital Region (NCR), is long queus of bewildered or angry people at stores selling government-subsidized rice.

Department of Agriculture (DA) regional director Oscar Parawan believes the seeming crisis is but the result of “market aberration”. In an interview with PeaceWorks, Parawan said the staple’s farm production and supply in the Zamboanga Peninsula is completely normal and stable, although prices are also rising as elsewhere.

Parawan said traders are speculating on rice, buying as much as they can get but holding back from selling in anticipation of prices going up later. This competition for stock is especially intense during the lean season, when harvests are lower, which is from February to July. This resulting artificial decrease of stocks in markets, he believes, is the main reason why prices are ballooning.

NFA assistant regional director Rolando Maravilla said his office is now conducting frequent inspection of private rice warehouses in the Zamboanga Peninsula to curb hoarding, which is punishable by law. So far, he said, the agency has not discovered any such violation. However, some rice retailers in the city have been caught selling NFA stocks at higher than the prescribed regulated price, while others were found violating the price tag law by the Department of Trade and Industry (DTI). Maravilla said the violators are being summoned by NFA, and the franchise of some has been cancelled already.

Residents in the region have no reason to fear a rice shortage, the NFA official says. The present total stock of rice in the region’s NFA and private warehouses is over 800,000 bags. This amounts to a reserve level of 45 days, he said, since the daily consumption by the entire Zamboanga Peninsula is a little less than 20,000 bags.

In addition, the procurement program of his office is humming smoothly. Imported rice from Vietnam is coming in regularly; it is buying palay – at the new rate of P17 per kilo – from local planters.

He admitted, though, that local private traders have been slower than usual in bringing in stocks from the traditional sources, like Cotabato, General Santos and Iloilo. Their fear of government crackdown in its intensified drive against hoarding as well as alleged demands for small bribes at checkpoints along the Zamboanga highway have discouraged the traders from shipping overland, and these are two of the more immediate reasons why there is some disruption in the rice pipelines. Talk of market aberration.

Maravilla said Zamboanga City has 386 NFA-accredited retailers, providing the agency an adequate system for selling rice to the public. Retailers in public markets get a daily quota of 10 bags, each containing 50 kilograms. Smaller sellers get 10 bags but only once weekly, Maravilla disclosed. The current retail price of NFA rice is P18.25 a kilo.

Maravilla welcomes the idea of selling NFA rice through Church organizations to increase the number of distribution outlets as well as to lessen headaches over selling violations. Church organizations, he said, can be relied upon to sell at only the prescribed prices and amounts. In Zamboanga City, he said, seven of such organizations are already selling NFA rice.

He fears, though, that prices even of NFA’s will continue to go up. Recently, the NFA central office announced that its retail price is likely to jack up due to higher acquisition costs. The NFA has been hemorrhaging billions of pesos due to its price subsidies. One estimate pegged this subsidy at about one percent of the Gross National Product.

As the cost of rice and other food commodities continue to inflate, Philippine think tanks predict a further decline in the nutrition intake of the majority of poor people, both urban and rural. Creeping economic decline by financial problems in the United States will force consumers to further cut back food budgets. Concerned quarters are already urging the national government to increase its welfare allocations for the poorer sectors to stave off greater hunger.

There are also calls to beef up support for farmers, who have been generally neglected in terms of government assistance for many years now. Boosting food production – particularly in Mindanao, which is considered as the production center of the country – is the new priority of the national government. Parawan said his department has just finalized a master plan designed to raise farm outputs, especially of rice, for up to 2010 by investing billions. Good idea, for as long as government officials can “moderate their greed” and prevent more fertilizers scams. Otherwise, President Arroyo – as the ill-fated French queen Marie Antoinette asked her subjects to do during a famine – will soon have to tell Pinoys to eat cake.

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