By Carlos H. Conde
International Herald Tribune
Published: March 25, 2008
MANILA: President Gloria Macapagal Arroyo ordered a crackdown on rice hoarders Tuesday, as her administration tried to blunt the impact of rice shortages that analysts said could fuel public unrest.
Arroyo also appealed to traders not to artificially raise the price of rice, the country’s staple food, which had risen by nearly 50 percent since January, according to official statistics. Filipinos have also been facing soaring prices of oil and basic household commodities.
In her directive, Arroyo ordered Agriculture Secretary Arthur Yap to “go all-out against rice hoarders to ensure that cheap government rice ends up on the tables of the intended consumers – the country’s poor.”
Yap, she said, “is staking out all NFA warehouses so he can follow the big 10-wheeler trucks and see where they are bringing rice,” Arroyo said, referring to the National Food Authority, the government agency tasked to regulate the rice industry.
The agency also runs the government’s rice-subsidy program; it buys rice from farmers here and abroad and sells it to the public at a cheaper price.
But officials said some traders have been buying the subsidized rice and stockpiling it to sell months later at higher prices. This practice, they said, has exacerbated the shortages as demand is growing. The government estimates that the country’s population, now at 85 million, will reach 94 million by 2010.
The Philippines, once Asia’s leading rice producer, is now its leading rice importer, according to the Ibon Foundation, an economic research group.
Last year, the country imported 1.8 million tons of rice, or 16 percent of its requirement, mainly from Vietnam and Thailand.
Earlier this month, Arroyo asked the Vietnamese prime minister, Nguyen Tan Dung, to commit his country to export 1.5 million tons to the Philippines. Vietnam pledged only a million tons, according to officials.
And last week, amid reports that government rice inventories were thinning, Yap suggested that fast-food restaurants cut rice servings in half to limit consumption and waste. According to the government, 25,000 bags of rice are wasted daily.
On Monday, Arroyo ordered the release of 1.5 billion pesos, or $37 million, to the Agriculture Department to help farmers improve production. But farmers’ groups said the money would do little to stabilize the country’s rice supply in the long term.
One group, the Rice Watch and Action Network, which is based in Manila, predicted Tuesday that “the worst is yet to come,” saying that the price of rice could rise to 40 pesos a kilogram, or 2.2 pounds – from the usual 25 to 30 pesos – during the lean months between July and September. The group said this year’s rice output, estimated at 1.8 million metric tons, “will last for only 55 days.”
The National Food Authority is likewise hard-pressed to purchase more rice from the international market, where prices have been hovering between $500 and $700 per metric ton, compared with $300 seven years ago.
Analysts warn that the rice crisis only adds to the problems facing the Arroyo administration, which has been dogged with corruption allegations.
“Along with all the political and governance issues, this crisis can fuel further unrest,” said Ramon Casiple, executive director of the Institute of Political and Economic Reform, a Manila think tank.
Critics said Arroyo needs to rethink agriculture policy, which they say contributed to the problem.
“Tight global supply and record-high prices mean that the country can no longer be assured that traditional sources of imported rice will be able to deliver like before,” said Rafael Mariano, president of the Peasants Movement of the Philippines.
He blamed the shortages in part on the conversion of agricultural land for commercial development, as well as the promotion of export crops like asparagus and bananas at the expense of staples like rice and corn.