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As early
as November 2005, more than three years ago, the US
Department of Agriculture (USDA) reportedly predicted a
30-percent year-on year drop in US Ending Stocks for
Rice. It also reportedly projected the 2006
stocks-to-use ratio to drop to 10.6 percent, from 16.4
percent a year earlier and the lowest ratio since the
period 1980-81.
By
October 2007, the USDA likewise reportedly projected
global consumption or rice at over 424 million tons for
the year, up from over 418 million tons in 2006. Global
production, meantime, was expected to remain relatively
steady in 2007 at just over 418 million tons, as in
2006. Offhand, that indicated a potential shortfall of
over 6 million tons.
Just in
January, realizing the potential problem of dwindling
global supply and the lack of local self-sufficiency,
the Philippines reportedly made known its plan to buy
550,000 metric tons of rice. The Philippines is
reportedly the world’s largest rice importer. By this
time, the USDA reportedly forecast global stockpiles of
rice to fall to 72.2 million tons by July, or the lowest
since 1984. And then in February, the Bangkok Post
reportedly came out with a story that Thai rice
exporters could start defaulting on orders due to
rapidly rising local rice prices.
And then
just last Tuesday, Reuters reported that the Chicago
Board of Trade July rice futures rose to $22.025 a
hundredweight in Asian electronic trading after jumping
by the 50-cent limit on worries about global supply the
previous day. It also said the tight supply picture was
reinforced after Indonesia announced it would curb
medium-grade rice exports in an effort to combat
inflation, joining other countries seeking to protect
domestic supplies.
At the
same time, Reuters reported that the Philippines said it
would enter the market for another 500,000 tons in May,
the second such tender in as many months, as it looks to
lock in 2008 requirements ahead of the typically lean
third quarter.
Global
rice prices have already more than doubled this year,
while Chicago rice futures are up by 60 percent over the
same period. Wheat prices, meantime, have gone up by
around 40 percent, previous reports indicated.
Obviously, any significant increase in prices, way above
the inflation trend, in the short term is indicative of
a widening supply gap. In fact, since early 2006, even
global dairy prices, particularly whole milk and butter,
have also been going up. In late 2007, local
distributors of cheese and butter were reportedly
already at a loss on trying to cope with local demand.
And the
culprits are? It can be bad weather, or rising global
population, or massive industrialization, or global
warming, or other factors, or all these factors. Fact
is, as early as three years ago, alarm bells were
already rung on global rice supply. And yet, strong
action, particularly by local officials, did not come to
fore until just several months back. Perhaps the
administration was too busy fighting fires in the
political front for its own survival, while the
opposition was all too concentrated on handing President
Arroyo her walking papers one way or the other.
Meantime, neither side paid too much attention to food
security and ensuring national survival.
Today,
however, is a different story. With all the political
lip going the food problem’s way, one can only hope that
all these words can sufficiently provide for hungry
families. Also, food security is slowly, but surely,
becoming a presidential-election issue, with the
contenders in 2010 all trying to outwit each other with
ideas to ensure that people will always have enough food
on the table.
But
production is not the only issue. With limited
resources, one can go only so far in ensuring sufficient
supply. Demand or consumption is the other side of the
equation, and equitable distribution becomes the issue.
Supply can be addressed by either better production or
higher prices, and, in the case of the latter, this pits
the haves against the have-nots. The result may be
social unrest. On the demand or consumption, the tools
are also higher prices or tapering demand through either
food alternatives or better population management.
Simply
put, one cannot address the issue of shortage without
looking at all sides of the problem. And while the
Arroyo administration has been vocal in its intent to
improve food production, either through self-sufficiency
or importation, it has done little to address the other
obvious issue: a population-rate increase that is beyond
the economy’s threshold to sustain development.
Moreover, it needs to put in place a more proactive
system of monitoring global trends in food production.
The food-supply problem did not happen overnight, and
yet it still caught us flatfooted. Early-warning signs
were readily available to those who required it, but a
quick-response system should have been put in place to
help activate the best and the brightest to put their
minds to fixing the problem before it worsened.
Today,
it’s rice. Tomorrow, it can be something as vital as
water. But the country is not without knowledgeable
experts in various fields of endeavor. And as a member
of the global scientific community, the Philippines has
allies and friends abroad. However, even if global
assistance is readily available to it, the what, when
and how of asking for help is more crucial. Effective
monitoring and early response are the imperatives.
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