Carlo's Think Pieces

Reflections of a Filipino in the Netherlands

The Philippines can overcome the rice crisis

Posted by butalidnl on 18 April 2008

Lately, there have been speculations to the effect that the government has blown up the rice crisis beyond proportion; that it used the rice crisis as a diversion from all the corruption scandals that plagued the government.  My reaction to this is: I don’t think it is a conspiracy. After all, the rice crisis is not only affecting the Philippines. In fact, it affects many more countries, with rice stocks being shepherded by surplus countries, and the price of rice and other grains rising dramatically.

I think that the rice crisis just arrived; and the government of GMA was confronted with it. Of course, I suppose it is a not unwelcome change after all the months of scandals and political intrigue. A crisis such as this makes things simpler. It even gives them an opportunity to regain a bit of good will with the people.

So, we have the crisis. But are we reacting too early?
I don’t think so. The fact that we don’t see hungry Filipinos rioting in the streets does not mean that we are just crying wolf, when the crisis is still far away. The crisis is real, it has been seen in advance – before becoming really acute. This is the right time to face it, when we still have more options. Both short term and medium term measures could still be taken to address the problem. If we waited too long, the problem would have become very difficult to solve, and no good options would be left.

It is good, in a sense, that we face the food crisis now instead of later. One crisis at a time, I would say. In a couple of years, the country (and the rest of the world, by the way) would be facing an acute fossil-fuel crisis with extremely high prices and even shortages. If we are successful in meeting this food crisis now, we will have enough capacity to deal with future crises when they do come.

Good steps taken, more needed.
One thing about having a crisis is that some political decisions may be easier to make then, than when there was no crisis. All of a sudden, things fall into place, and the necessary steps are perceived as such; and as the “lesser evil” as compared with not taking those steps. Let us take a look at some of the good first steps taken by the government which they could not have taken without a crisis. These would include:
– a freeze on land conversion;
– increased farm-gate price for rice (from P12 to P17);
– more funds earmarked for increasing agricultural production.

Of course, these are just a start. They should be followed up. A freeze on land conversion should be followed by a comprehensive Land Use Law, and even specific decisions to roll back many cases of land conversion. Increased farm-gate prices don’t mean much if there is not enough money set aside for the NFA buying program. And funds set aside to improve agricultural production should be used well.

Additional steps need to be taken, and they require a bit more political will than the initial steps mentioned above. First among these would be a freeze on the biofuel program. It is scandalous to continue with using food crops for transport fuel, at a time when people are literally getting short of food. The biofuel program should at the minimum be frozen.

Then there comes the question of the Comprehensive Agrarian Reform Program. The current CARP is coming to an end, even though there is still a lot of land at the hands of landlords that have managed to evade redistribution. CARP should be extended, and the remaining lands redistributed. As part of CARP,it is important that the government support the new (small scale) landowner/farmers with extension services, financing, post-harvest facilities etc.  They should really be assisted, so that they can immediately make optimum use of their land to produce food.

An even more “sticky”, but necessary, step would be to “liberalize” rice processing and distribution. Rice millers and wholesalers have a stranglehold on the farmers – they lend farmers cash, fertilizers, seeds, etc. and in turn the farmers have to sell their harvest through them. This monopoly position make it possible for them to dictate prices, and to block others who try to buy or mill rice. What they are doing is not technically classifiable as “hoarding”, but the effect is almost the same, since it stifles productivity, and minimizes the income of the farmers, resulting in smaller harvests. Mechanisms should be set up to open up the agricultural market – for there to be real competition among millers and distributors.

And lastly, Overseas Filipinos (even those with other passports) should be allowed to invest in agriculture. This would open a vast reservoir of capital and knowhow that our agriculture sector can put to good use.

We can overcome this crisis.
This crisis is one which I am sure the Philippines can overcome. We have a lot of good ideas; we have enough technicians and managers.  We even have enough financial resources (especially if we count the increased allocation of government funds, and tapping Overseas Filipinos).  The problem we now face, with the rice shortage, was caused and aggravated by the lack of political will. We can even say that politicians didn’t pay attention to the problem – and didn’t feel the need to take the necessary steps to address it. Now that the problem has to be solved, it will be. Or political careers would suffer.

Solving the food crisis will also put the Philippines in a better position to solve other crises that we are sure to encounter in the coming years. If we successfully address the food crisis, we will have proven to ourselves that this kind of big problem can be solved, if we just decided to do so.

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