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More than
anywhere else in
Asia, the soaring
price of rice has become a good-vs.-evil drama in the
Philippines, one of the world’s largest importers of
rice. Traders who fiddle with the price of the nation’s
all-important staple now face life in prison. Police are
raiding warehouses in search of hoarders. Soldiers and
police have been mobilized to help sell
government-subsidized rice to the poor.
“Anyone
caught stealing rice from the people, we will seek to
throw in jail,” President Gloria Macapagal-Arroyo warned
last week, as part of her high-profile crackdown on rice
cheaters.
For all of
Arroyo’s theatrics in recent days, the fundamental reasons
behind the recent spike in rice prices—in the Philippines
and across the world—are neither new nor part of a
morality play.
As experts
have been warning for years, the cost of growing
rice—thanks to much higher fuel and fertilizer prices—has
been rising faster than the price paid by consumers. At
the same time, yields on rice farms have leveled off, as
spending on agricultural research has declined. And
consumption of imported rice has increased sharply,
especially in
Africa.
Something
had to give. The world price of rice has jumped by close
to 80 percent since January 2007. Not all of that increase
has yet been felt by consumers here, but retail rice
prices are up by 20 percent to 30 percent, and prices paid
to Filipino farmers for their spring crop have jumped by
as much as 50 percent.
“The price
of rice is going to stay high,” said Robert S. Zeigler,
director general of the Philippines-based International
Rice Research Institute (IRRI).
Governments, though, can almost certainly guarantee an
abundant long-term supply of rice in most of Asia,
according to Zeigler and many other experts. “We can deal
with these challenges, if we have good government policies
and long-term investment,” Zeigler said.
As
explained by rice researchers and farm economists, the
solutions are as simple as better maintenance of
irrigation ditches and as complicated as developing a new
generation of fast-growing rice.
But in the
Philippines, at least so far, the government has made few
commitments to long-term solutions. It is confronting the
rice crisis with moves that grab headlines: threats of
lifetime prison sentences, warehouse raids and troop
deployments.
In
international trade, rice is an unusual grain. About 7
percent of world production is sold across borders, far
less than wheat or corn.
In most
Asian countries, the bulk of the crop is kept at home,
because rice is much more than a mere food. It is a
strategic, riot-preventing political resource—an
emotionally resonant symbol of plenitude and proud
self-reliance.
Thanks to
a research-driven surge in rice yields that was part of
the Green Revolution of the 1960s, rice symbolism across
Asia has never been so good, at least until last month.
The
largest rice-eating nations—China and India—usually grow
more than enough for domestic consumption.
Even the
Philippines produces about 90 percent of the rice its 90
million people need. The amount of land planted in rice is
at record levels here, and the crop has increased annually
for years.
The
pan-Asian surge in rice yields, though, has had a perverse
effect. It convinced many governments that they no longer
needed to invest in research and extension services aimed
at improving harvests.
As a
result, spending on those programs has been stagnant or
falling for 15 years. The IRRI has lost half its funding
over that time, Zeigler said. He added that the US Agency
for International Development has this year zeroed out its
funding for the institute.
Membership
in Asia’s separate and unequal rice clubs—importers and
exporters—is determined by relative amounts of land and
water.
The
standout exporters are
Thailand,
Vietnam and Cambodia, which have fertile river deltas with
land and climate that are nearly perfect for rice
cultivation. At the other extreme are countries such as
Indonesia, Malaysia and the Philippines. These island
nations have limited land area, transport complications,
problems with typhoons and long histories as importers of
rice.
Thanks to
the recent surge in prices and the resulting alarm among
Asian governments, rice researchers and farm economists
say that long-term prospects for research-driven increases
in rice yields in Southeast Asia as a whole are excellent,
given the region’s natural advantages.
But rice
self-sufficiency in a nation such as the Philippines is a
much taller order—one that is defied by history, weather
and a population growth rate that is among the highest in
Asia.
“Over the
past 100 years, no matter what we do, we have almost
always been importing rice,” said Rolando Dy, executive
director of the Center for Food and Agribusiness at
Manila’s
University of Asia and the Pacific.
To work
toward the symbolically important but geographically
unrealistic goal of rice self-sufficiency, the Philippine
government has a long, costly and ultimately unsuccessful
history of limiting imports.
The
professed goal is to motivate Philippine farmers—with
higher prices in a protected market—to grow as much rice
as they can.
For nearly
a century, this has meant that Filipino consumers have
paid higher prices for rice than people in countries where
the grain is grown more efficiently. Still, local farmers
are falling further and further behind the rice-consuming
demands of a country where the poor eat far more rice per
capita than the rich or middle class and are by far the
fastest-growing segment of the population.
To head
off potential rice riots, the government reigns as the
primary buyer of imported rice. Its official policy is to
sell the imports to the poor at a price they can afford.
Jesus
Foncardas, an unemployed father of five in Manila, was one
of tens of thousands of Filipinos who queued up this week
to buy subsidized rice from the National Food Authority (NFA).
Its price is about 20 cents a pound, half the price of
rice in stores.
“We used
to ignore this government rice, but the price of rice in
the stores has gone up so much,” said Foncardas, 57. “I
had to stand in line for a half-hour to buy from the
government.”
While
government-imported rice is supposed to be for the poor,
getting it to the poor at a price they can afford has
proved difficult.
For
decades, unscrupulous traders have bought this rice at the
subsidized price, then repackaged and resold it at the
higher market price, pocketing a handsome profit. “The
system promotes corruption, with bureaucrats in the
National Food Authority in cahoots with the traders,” said
Dy, the professor of agribusiness.
To end
this pattern of corruption, Arroyo suspended the licenses
this spring of thousands of retailers to sell subsidized
rice in shops across the country. She ordered the NFA to
sell it, from government stalls and from churchyards
across the country.
“I am
leading the charge to crack down on any form of
corruption,” Arroyo said this week.
Her
government has also instructed fast-food restaurants to
halve servings of rice and advised Filipinos to save their
rice leftovers.
So far,
the most visible human consequences of Arroyo’s charge are
long lines of poor people standing in the hot sun in front
of a limited number of the new government-run outlets,
waiting to buy small quantities of the subsidized staple
that the government insists is not now in short supply.
Televised
images of poor people in lines “create the impression of
severe shortage, consumer panic and an administration that
seems to be losing control of the situation,” according to
an editorial Friday in the BusinessMirror, the country’s
leading economic newspaper.
Outside of
Manila, on the small farms where nearly all of the
country’s rice is grown and harvested by hand, the spike
in rice prices has arrived in time for the April
dry-season harvest.
“We are
making a jackpot on this,” said Sesinando Masajo, 74, who
recently sold most of his crop at a price 55 percent
higher than what he was paid in October.
He said he
has begun buying fertilizer for the rainy-season crop in
the fall. He is also considering planting a third rice
crop this year.
“I would
describe rice farmers as being very happy,” he said.
Economists
and rice researchers expect that higher farm prices should
by autumn result in a sharp increase in rice production
across Asia.
For the
Philippine government to take maximum advantage of the
market incentives, it should invest in irrigation
maintenance, provide more farmers with hybrid seeds and
repair potholes in farm-to-market roads, according to
several experts at local universities and at the IRRI.
Whether the government, which has neglected these issues
for years, will now invest in them is not yet clear.
Masajo,
for one, applauds all these ideas. He would also like the
government to get out of the price-regulation business.
“I don’t
like government control,” he said. “It is like martial
law. You can be pushed around.” |
