Philippines faces rice shortage

This is from the Inquirer. While there are natural causes of the rice shortage corruption within the system also plays a role. Rice is a staple food in the Philippines and if the price continues to rise this will cause hardship among the poor. I was suprised to see that the Philippines actually imports some rice from the U.S. The notorious fertilizer fund was distributed to some urban politicians as well as rural areas.


Inquirer Headlines / Nation
http://newsinfo.inquirer.net/inquirerheadlines/nation/view/20080318-125372/Fast-food-outlets-told-to-cut-rice-serving
Fast-food outlets told to cut rice serving


Philippine Daily Inquirer

Posted date: March 18, 2008


MANILA, Philippines—As the country faces a looming rice shortage, the Department of Agriculture wants fast-food outlets to offer half portions of rice to encourage Filipinos to eat less of the staple.
“I’m asking fast-food restaurants to give their customers an option to order half a cup of rice because right now if you do a survey of all the fast-food joints you will notice a fraction of them always have excess rice,” Agriculture Secretary Arthur Yap said Monday.

Yap noted that people “don’t really finish their rice.”

Fast-food restaurants are popular meeting points for families and office workers in the Philippines and Jollibee Foods Corp., the country’s biggest fast-food chain, as well as international rivals McDonalds and KFC serve rice with their burgers and deep-fried chicken.

The Philippines is struggling to source supplies of up to 1.8 million metric tons this year amid the tight global supply and surging prices.

The Department of Agriculture has warned of a rice deficit of 2.1 million metric tons, equivalent to about two months’ worth of consumption, this year, according to Sen. Manuel Roxas II.

“It’s safe to say that we have enough supply of rice from January to October this year. Come November, where will we get our supply from? And that’s a big concern for us. We cannot depend anymore on other countries’ exports,” Roxas, chair of the Senate committee on trade and commerce, said Monday.

Calling for early action, Roxas urged Malacañang to release calamity funds to local government units so they can store rice to meet the impending shortage.

No shortage yet

Global commodity prices, including those of rice, have soared to record levels for the following reasons:

• Growing affluence and changing diets in developing countries, resulting in higher demand for food.

• Oil price increases, which are driving up freight rates and the cost of irrigation and petroleum-based fertilizers.

• Supply disruptions like floods.

• Stagnating output.

• Higher prices of inputs like fertilizer.

• Funds flowing into commodities as a hedge against a weak US dollar and falling stock markets.

Yap said the Philippines, where rising harvests could not keep pace with population growth of three babies a minute, was not facing a shortage of its national staple but people should conserve the grain, which is eaten at breakfast, lunch and dinner.

If Filipinos could be more prudent with their consumption, rice imports could go down by 37 percent to 1.17 million metric tons compared with last year’s import requirement of 1.87 million metric tons, according to the Department of Agriculture.

Old saying

Other senators are blaming President Gloria Macapagal-Arroyo for the looming rice crisis and for making the Philippines the world’s biggest importer of the cereal.

“Remember the old saying—Magmahal at magkulang na lahat, huwag lang bigas (Everything may cost more and suffer shortages but not rice),” Sen. Francis Escudero said in a text message.

He said the rice crisis should be addressed and taken seriously by the government.

“The root cause is not only external shocks but issues related to high cost of inputs; absence or lack of forward planning; and the shift to corn and jatropha.”

Escudero noted that the government’s thrust to promote jatropha in support of the biofuel program could have diverted funds intended for rice development to oil alternatives.

Rice cartel

Senate President Manuel Villar said the government had a lot of explaining to do on the rice crisis.

“First, the rice cartel. A lot of people might be taking advantage of the situation. Second, the fertilizer scam in which the government did not cooperate in our past investigation. Corruption in areas that directly affect the poor should never be tolerated. If our rice production is low, it is undeniable that fertilizer is one of the reasons,” Villar said in a press conference.

Worse than broadband scandal

Aside from being ineffective against the rice cartel, the government has been lax in checking corrupt practices in the National Food Authority (NFA), according to Villar.

“With the world price of rice spiraling, the government must do its best in handling the crisis because this could be more serious than the National Broadband Network scandal,” he said.

Roxas blamed the NFA for allowing government-bought rice meant to be sold cheaper than commercial rice to get into the hands of unscrupulous rice traders.

He also took to task the agriculture department for failing to secure the country’s rice production.

Roxas said two of the country’s traditional sources of imported rice, China and India, would likely consume their rice surplus instead of selling it to the Philippines.

Emergency rice fund

The Philippines has failed in three consecutive auctions to obtain the full volume of rice it needs and is hoping to tap an emergency regional rice fund to help with a potential shortfall.

Thailand has committed to set aside 15,000 metric tons of rice for the Philippines under the East Asia Emergency Rice Reserve and officials have also contacted Indonesia, Malaysia, Japan and South Korea.

Results for last week’s auction for 550,000 metric tons of rice, which only attracted 355,500 metric tons of bids, are expected this week.

The Philippines is also looking to re-tender to buy up to 100,000 metric tons of rice from the United States after receiving only one bid last week. It is buying the US rice using $65 million in credit guarantees from the US Department of Agriculture.

Rising nervousness

Last month, Ms Arroyo went outside normal commercial channels to ask the Vietnamese Prime Minister Nguyen Tan Dung to guarantee a supply of up to 1.5 million metric tons of rice, signaling rising nervousness about tight supply.

Vietnam, however, said it could only guarantee 1 million metric tons of rice, which already includes a volume of around 700,000 metric tons which Vietnamese traders had already agreed to supply in auctions in December and January.

Vietnam sold nearly 1.4 million metric tons of rice to the Philippines last year.

Vietnam has halted the signing of contracts for rice exports for loading in March and April as it extends a curb from last month to stabilize rising prices on domestic markets, an industry official said Monday. Reports from Reuters, Gil C. Cabacungan Jr. and Dona Pazzibugan





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