Monday 31 May 2010

The Rice Market Report is back

Dear Readers, After 20 days unavailability this blog is again accesible. Blogger, the hosting site, had labeled it as spam and subsequently removed: it has now been resotered and is fully functional. I am going to start posting again very soon. Thanks to all my readers. Alberto Torchio

Tuesday 11 May 2010

Philippines Government says yield is up, but 'where's the rice?'

Frisco M. Malabanan, national coordinator of the GMA (Ginintuang Masaganang Ani) Rice Program, says rice production has been rising since President Gloria Macapagal-Arroyo took office in 2001.

This is supported by data from the Bureau of Agricultural Statistics (BAS) that indicate a steady increase in palay production—from 12.95 metric tons per hectare in 2001 to 16.24 MT per hectare in 2007.

The assessment of Estrelita Mariano, spokesperson for the rice price watch group Bantay Bigas, is quite the opposite.

Mariano, who served as secretary general of Amihan National Federation of Peasant Women in the 1990s, believes that the government projects a totally different picture of the agricultural situation.

"Government assistance to farmers is hardly noticeable, and whatever program that Gloria talks about is mainly for show and does very little to help the Filipino farmer," she says.

Ms Arroyo announced in 2001 at the onset of her term her plans to develop the agriculture sector to provide a million jobs.

"We will approach this with a sense of urgency," she said in her 2001 State of the Nation Address. "I do not want the one million new jobs to come in the long term. I want a timetable. I want to identify accountabilities. I want milestones," Arroyo said. "Cheap rice and productive farmers—these are our goals for the people."

Romeo Royandoyan, executive director of the Philippine Center for Rural Development Studies (Centro Saka), says the Arroyo administration has failed to meet its targets, blaming this on its lack of sincerity to promote self-sufficiency.

"A policy conflict exists when the government encourages massive land-use conversion and increased rice production, farmer self-reliance and dependence on foreign-provided hybrid seeds. This only benefits the big shots, the multinational corporations, and is detrimental to ordinary farmers," he says.

In April 2008, the country was engulfed in a global food shortage that sparked tensions in over 30 countries and threatened to drive more than 100 million people in the developing world deeper into poverty.

Causes of shortfall

The shortfall was blamed on climate change, booming population, new-found affluence that has put more food on the table in China and India, conversion of grains into biofuels, natural disasters in the United States, Australia and Bangladesh, and export restrictions by rice producers.

To ease the crisis, the Philippines went on a massive rice importation drive, selling the commodity at subsidized prices.

That same year, the Department of Agriculture launched its FIELDS program at the National Food Summit, focusing on the six most significant points of the agriculture sector: Fertilizer, irrigation, extension and education services, loans, dryers and post-harvest facilities, and seeds.

Part of the FIELDS program entailed a self-sufficiency goal to be attained this year.

However, when it appeared it could not be met, the target was moved to 2013, making it a burden of the next administration to tackle the long-running issue of food security.

Drop in fertilizer supply

One major problem was fertilizer supply.

According to the BAS, there was a drop in fertilizer supply disposition in 2008 that coincided with the Senate investigation of Agriculture Undersecretary Jocelyn "Joc-joc" Bolante in connection with the P728-million fertilizer scam.

Underscoring a major failure in the program to achieve self-sufficiency, the Senate inquiry revealed that the fertilizer funds—distributed to Ms Arroyo's political allies during the harvest season—were essentially used to buy votes in the 2004 presidential elections.

The fertilizers were secured at an overprice of 682 percent, or by P128 million, according to the Commission on Audit.

The development of the agricultural sector has been identified by economists and academics as a key to mitigating poverty in this country.

A 2006 survey conducted by the National Statistical Coordination Board showed that more than 27 million Filipinos live below the poverty threshold, surviving on a dollar a day, according to a World Bank standard.

No longer self-sufficient

The problems in fertilizer are essentially tied to our loss in rice self-sufficiency, says Mariano.

"We are no longer self-sufficient nowadays because of a loss in traditional, regular seeds," she says.

Mariano says that the establishment of the International Rice Research Institute produced hybrid seed varieties that were expensive and required costly fertilizer.

"Increase in expenses forced farmers to borrow money, thus increasing their burden," she says.

For one, the government considers rice importation from Asian neighbors such as Vietnam and Thailand a necessary step in achieving food security, as high a priority as achieving self-sufficiency.

This means that while the FIELDS program is being implemented, the Philippines will continue to import rice.

Imports not an issue

According to Milo de los Reyes, GMA Corn Program Secretariat, food security should not be an issue of importation versus self-sufficiency.

"It's all about management of supply and use. We have to make sure we are food-secured first by improving farmer productivity and increasing farmer's income. Then if necessary, we import," he says.

The government puts a prime emphasis on rice production as a measure of agricultural progress, he says. The higher the output rate, the better.

De los Reyes admits self-sufficiency may be a difficult goal to fully achieve because of the country's burgeoning population. "You can't manage or control resources if you have an increasing population every year," he says.

However, when asked if he thought the GMA Rice and Corn Programs, along with FIELDS, was a success, he unhesitatingly said, "Yes, it is."

Better than global average

Emerson Yago, science research specialist and spokesperson for the GMA Rice Program, points to the DA's positive production levels. They have been increasing over the years until 2009, he said, when Ondoy and Pepeng caused heavy damage to agricultural crops.

Yago says that annual agricultural growth was even higher than global figures, which meant that the country was even doing better than the global average.

According to the Philippine Rice Masterplan for 2009-2013, local annual growth from 2000 to 2008 was 3.07 percent, compared to global growth of 1.45 percent.

This doesn't necessarily mean much for the farmers like Marquez, who does not see improvements in his rice yields.

Cathy Estavillo, current Amihan secretary general, also weighs in on the government's glaring deficiencies in the agriculture sector.

Estavillo believes that above anything else, agricultural reform should encompass agrarian reform as well as the country's withdrawal from the World Trade Organization, in keeping with her rejection of agricultural economic liberalization.

"We understand the government's policies and programs are very good. But the government has done nothing to realize them. The question to ask is: How willing is the government to actually promote agricultural reform?" she says.

One meal a day

"Go to any province in the country and you will see what I mean. Families have barely enough to feed their children. Mothers feed their children porridge in the evening, the only meal of the day, and water for breakfast, because that's all they can afford to eat. It's very sad," she explains.

Royandoyan has spent years battling it out in agriculture hearings in Congress, trying to convince bureaucrats to reverse the government's market-oriented approach to agriculture.

He is especially concerned with the country's stubborn insistence on depending on the world's rice stock, which he explains is shockingly less than 7 percent.

"When another rice crisis looms, 5 to 6 percent of that figure will go to China's supply. What will the Filipinos eat then?"

Thai weekly price update


Domestic and export prices declined slightly by 1.0 percent as the government direct purchase program has not been fully implemented to mitigate the downward pressure of new supplies. Meanwhile, some quotations remained unchanged due to concerns over the exchange rate. The weekly benchmark prices for March 29 – April 4 were higher than the previous week's and remain higher than market prices.