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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.

Vietnam rice price update

Rice price offers were unchanged last week because exporters were trying to keep the prices from declining. Buyers, however, were still waiting for lower prices resulting from the bumper harvest of the Spring crop in the Mekong River Delta. Trade activities, therefore, were almost nonexistent last week. Paddy prices were unchanged last week. According to rice exporters, the prices staying steady during the recently completed peak harvest time is due to the Vietnamese government's rice purchase program, which started in early March 2010.

Bangladesh approves white rice imports at $388.92/T

Singapore-based Indo-Sino and local Tanvir Enterprise have won a Bangladesh tender to buy 50,000 tonnes of white rice at $388.92 per tonne, cost and freight, a official said on Sunday. The country's state grain buyer in February issued the tender to import white rice from any origin that closed on March 7, as part of an effort to hold down domestic prices. Indo-Sino, which made the lowest offer at $388.92 in the tender, would supply 35,000 tonnes of white rice while second-lowest bidder Tanvir Enterprise would supply the rest 15,000 tonnes at the same rate, the food official said. "The cabinet purchase committee approved the proposal at a meeting on Sunday, and will soon sign contracts with the companies. Shipment must take place within 60 days after the signing," he said. Indo-Sino also made the lowest offer at $492 a tonne, c&f, in another tender to buy 50,000 tonnes of parboiled rice, that closed on March 22. Bangladesh, the world's fourth biggest rice producer, plans to import 300,000 tonnes of rice in the current fiscal year through June. Market sources said it could be part of a government move to build food reserves after it failed to procure enough rice locally. The government is also buying 750,000 tonnes of wheat by June. The south Asian country produces around 30 million tonnes of rice, normally enough to feed its population of 150 million, but often requires imports to cope with shortages due to natural calamities such as floods and droughts. Bangladesh had to import rice worth $800 million in 2008. Rice prices have risen over the past few months despite a good crop and healthy levels of stocks. In January, the government extended a ban on rice exports until June to contain price increases. Bangladesh usually exports a small quantity of aromatic rice. At that time, the government also started open market sales of rice in the capital and adjoining districts to tame food inflation, which shot up 10.56 percent in January from a year earlier after a rise of 9.50 percent in December.

Rice prices set to ease on record rabi output

India, the second largest producer of rice, accounts for 19.70 per cent of global production. Wi­thin India, rice occupies one-quarter of the total cultivated area and accounts for about 40 to 43 per cent of total foodgrain production. The average retail price of rice h­a­s shot up by around 48 per cent in the past two years to Rs 1,942 per q­u­­in­tal. In the south, it has surged by ap­­­p­­roximately 60 per cent over the sa­­me period. Ashish Kapur, chief ex­ec­utive officer of Invest Shoppe, says altho­u­g­h rice prices have witnessed strong growth in the recent past, one ca­n expect prices to ease in the near term on the back of record rabi crop production. Earlier, rice production had slu­mped around 10 million ton­nes in the kharif season as drought plagued over one-third of the country, prompting the government to bo­ost the public di­stribution system a­n­d intervene in the market to check the price rise. The go­vernment also said that if required, it would undertake an open-market intervention, w­­h­­ich means that the government m­­­­ay buy more to build adequate res­erves and strengthen the public distribution system for any contingencies. According to latest estimates, India is the world’s fifth largest rice exporter. The country is likely to ex­p­ort 20 lakh tonnes of rice in 2009-2010, which is the same as last year. Th­ailand, which is world’s lar­gest rice ex­porter, acc­ounts for aro­und 85-100 l­akh tonnes of shipme­nts per year, followed by Vi­etnam (55 lakh tonnes), the US (31.50 lakh to­n­­nes) and Pa­kistan (around 38 lakh tonnes). Since the beginning of the year, the price of rice has plunged more than 19 per cent on the Chicago Board of Tra­de (CBOT). Anand James, chief analyst, Geojit Comtrade, said, “The US dep­artme­nt of agriculture’s forecast for incr­eased 2010 plantings is seen as one of the reasons for the steep fall in ri­ce prices in CBOT since January. Ho­w­ever, prices have already been under pressure for some time also due to the rise in supply from the world’s top two exporters — Thailand and Vietnam. Thailand is about to har­vest the se­c­ond crop, which, as per Thailand’s agriculture ministry, cou­ld produce roughly 7 million tonnes.” Expectations of a further rise in supply has brought prices of Th­a­ila­nd’s B-grade white rice to as low as $510, a drastic fall when compa­red with the record of $1,080 per tonne quoted in April 2008. Recently, prices have found some respite from sharp falls due to stockpiling by the governments of Thailand and Vietnam. Short covering in CBOT was also seen in the past few sessions as margins were eased on rice futures, am­o­­ng some other commodities. Rice procurement by the Indian go­v­ernment has crossed 25 million to­n­­nes in the ongoing 2009-10 kh­arif marketing season, nearly 2.9 mi­llion tonnes short of target. According to official data, total rice purchased by the Food Cor­poration of India (FCI) and state ag­encies stood at 25.13 million tonnes so far this season, against 25.57 million tonnes in the previous season. The world’s total trade in rice is estimated aro­und 30,845,000 tonnes for 2009-10, wh­ich is 7 per cent higher than last ye­ar’s 29,029,000 tonnes. The ban on exports of non-basmati rice may continue indefinitely and sc­rap duty on imports will enc­ourage pr­ivate imports of the grain. The area planted with rice in the South Asian nation this year is 7 million hectares, less th­­an a year earlier, and may lead to a drop of 16 to 18 million tonnes of mo­nsoon-sown rice output. Rice ranks as the third principal st­aple food in the world after wheat and maize. The country’s rice demand is projected at 128 million tonnes by 20­12, which requires a production level of 3,000 kg per hectares, much higher than the present average of 1,930 kg per hectares. So, in the medium to long run, we ma­y face a demand and supply mismatch that continues to support prices at lo­wer levels. CBOT benchmark May rice contract continued to fall from a high of $16.45 per hundred pounds on Dec­ember 14, 2009 to a low of $12.12 on Ma­rch 31, 2010. “This pressure is seen amid te­c­h­nical selling and the US departm­ent of agriculture’s fore­cast for inc­reased 2010 plantings in Am­erica. St­r­ong support was seen at $11.90 and $11.20. May futures are likely to rem­ain under pressure as long as resistan­ce is seen at $12.90,” Vibhu Ratand­hara, assistant vice-president at Bon­anza Commodity, said. At present, rice futures are not tr­a­ded on any of the Indian commodity exchanges.

Argentina rice report

Post forecasts MY 2010/11 milled rice production at 930,000 MT on 230,000 hectares. The Argentine rice sector is expected to increase slightly its planted area due to good international prices, increased export demand, and fewer marketing restrictions than in the other grains. Post estimates MY 2009/10 rice production at 910,000 MT on 220,000 hectares. Post forecasts domestic rice consumption for MY 2010/11 to remain at similar levels as the previous year at 320,000 MT. Rice is not a staple product for the Argentine consumer and is not an important part of the Argentine diet. Per capita rice consumption in Argentina is very stable at approximately 7 -8 kilos (rough basis). Post forecasts a slight increase in MY 2010/11 total rice exports to 610,000 MT due to high prices, and strong export demand from Brazil, Venezuela, and other markets, as well as a small increase in production.

Thailand hopes to end rice price war

The Commerce Ministry has been ordered to send negotiators to Vietnam to initiate discussions on ending the rice price-war between the two countries, Deputy Prime Minister for economic affairs Trairong Suwankiri said on Friday. “The discussions will aim at organising bilateral talks between Prime Minister Abhisit Vejjajiva and the leader of Vietnam during the Asean summit in Hanoi from April 7 to 9,” Mr Trairong said. He admitted Thailand and Vietnam were competing for market share and offering rice for sale at lower prices. Bilateral talks on the problem would help end the price war, improve cooperation and boost rice prices, he added.

Domestic, export rice prices fall

Domestic and export rice prices have fallen due to increased supply in the market, particularly from Vietnam. Chutima Bunyapraphasara, director-general of the Internal Trade Department, yesterday said domestic prices had gradually dropped by Bt300-Bt1,000 a tonne in March compared with February, due to lower demand. Vietnam, which is Thailand's major export competitor, has had higher production at 8 million-9 million tonnes during its winter-spring crop, while many importing countries are still delaying placing orders, she said. The Thai domestic price of jasmine rice was quoted at Bt13,500-Bt14,300 a tonne yesterday, down from Bt14,600 in February. Paddy white rice was traded at Bt8,500-Bt9,200 a tonne, against Bt9,565, due to high supply from second-crop production of 8.38 million tonnes. According to the Thai Rice Exporters Association, the price of jasmine rice is unchanged from last week, but the prices of other types of rice have dropped significantly. As of yesterday, jasmine rice was quoted at $998 a tonne and Pathum rice at $739 - down from $772 on March 24. Five-per-cent white rice was quoted at $486 a tonne, down from $502. In a bid to increase domestic prices, the Commerce Ministry has opened more points for direct purchases at reference prices from farmers. The ministry currently has 83 purchase points in 22 provinces.

Philippines paddy rice procurement slides due to El Niño

The government’s palay (unhusked rice) procurement as of the third week of March slid by almost a fifth from a year earlier amid an El Niño-induced drought. In a statement, the Agriculture department said the National Food Authority (NFA) bought 962,655 bags of palay — 489,114 bags in January, 339,543 bags in February and 133,998 bags by the third week of March. It is targeting to buy 696,900 bags this April, the peak of the summer harvest. NFA Administrator Jessup P. Navarro noted that with tight rice supply, its active buying had pushed competition among traders, benefiting farmers. The farm level price of paddy rice averages P16.82 per kilo — 75 centavos higher than a year earlier — or P37.50 per cavan of 50 kilograms. The NFA buys clean and dry paddy rice at P17.70 per kilo, inclusive of drying, transport and cooperative development incentives. These incentives bring the agency’s effective palay buying price to P885 per cavan. Navarro noted that aside from higher prices, farmers also can either immediately sell their produce or wait for the price to appreciate further. Farmers who planted their crop early were also spared from the ill effects of El Niño, producing clean and dry palay that they can sell higher with minimal expenses. The NFA is buying at a daily average rate of 8,960 bags. Southern Tagalog posted the highest volume of paddy rice bought with 458,570 bags, most of these coming from Occidental Mindoro totaling 223,270 bags. Procurement was also high in the Ilocos region at 167,893bags, mostly from La Union and Western Pangasinan. The Bicol region also posted high procurement volume at 151,133 bags mostly bought from Camarines Sur. The NFA bought 53,370 bags from Central Mindanao farmers, more than half of which came from Sultan Kudarat. The NFA is aiming to buy 11.7 million bags of palay this year.