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IT is a
food crisis now. At first, there was just disruption of
the movement of food staples from producers to
consumers. But when inadequate supply triggered riots in
some countries, food prices began to soar. And when
soaring prices combined with the fear of scarcity, the
tipping point was reached. The world fell into an
emergency from which there is no easy escape.
When the
Thai government joined other governments in imposing
curbs on its rice exports, it sent jitters all over,
even in rich Hong Kong, where people started hoarding
rice. These shortsighted actions of certain governments
and the panic they sow are fueling the rice crisis here
in
Asia. Soaring prices and the fear of scarcity have prompted both
consumers and governments to hoard.
India,
Vietnam, Cambodia, Indonesia and now Thailand have all
announced drastic limits on the amount of rice they will
export.
What is
true of rice is also true of other food staples. As
these traditional food exporters tighten their grip on
reserves, countries that rely on imports are scrambling
to secure supplies. And the biggest losers are the poor
developing nations, which include us.
On
Monday the world’s biggest rice exporter, the
Philippines, failed in its auction for 675,000 metric
tons of rice from food exporters. The auction attracted
only one bid—from Vietnam Southern Food Corp. And the
company could not provide the bank guarantee for its bid
offer, which was required by the bidding.
The
auction’s failure underscores, more than anything, how
supplies have pirouetted from abundance to insecurity
because of the reluctance of producers to meet market
demand. Just less than a year ago, I remember how some
countries and their governments were virtually pleading
for us to source major parts of our rice imports from
them.
At this
point, the price of rice has doubled in just a year, a
record high. There are, of course, many factors that
have contributed to pushing rice prices up. According to
analysts, these include bad weather, industrialization,
lack of investment in agricultural research, demand for
biofuels and growing demand in India and China. But they
are also unanimous in saying the immediate crisis facing
the world today could be lifted if governments would
only stop hoarding and lift their export restrictions.
If everyone will just trust the market, the needs of all
can be met.
This was
quickly apparent in
Hong Kong during the recent jitters. When Chinese Premier Wen Jiabao stepped in
and promised to ensure rice supplies to HK after
panic-buying emptied supermarkets of their rice
supplies, calm returned. According to Kyoko Altman of
CNN, “Last I checked, my local supermarket had plenty of
bags of rice, so I won’t have to buy that extra supply
after all.”
But such
assurances are precisely what are still missing in the
scene these days. The government of
Thailand
recently announced an initiative to form a cartel among
rice-exporting nations, mainly in Southeast Asia. This
sounds too much like the Organization of Oil Exporting
Countries to inspire much confidence from rice
consumers.
The
cause of rice-importing countries like the Philippines
has received some backing from the developed world and
the United Nations. They have issued calls for exporters
not to restrict the availability of global supplies,
arguing this would only make things worse.
But so
far, there is no agreement between sellers and buyers.
One is still inclined to hold back, and the other to
desperately hunt for supply. There could be some truth
to the claim of one observer that the Philippines is
contributing plenty to the skyrocketing of rice prices.
It is a
step forward that international organizations, together
with major aid donor-countries and agricultural powers,
are linking together to address the food crisis. The
effort is being led by no less than UN Secretary-General
Ban Ki-moon, who established a high-powered
international committee to man the effort. Though there
are indications world rice prices may now be moderating,
it is certain that price levels will not, perhaps never,
go down to what they were a few years ago.
How do
we, here in the
Philippines,
face up the problem?
We begin
by acknowledging that we are now living in a new era of
higher food prices. Given this, we must commit to making
a supreme effort to produce more of rice and other food
we consume. There’s nothing we can do about our lack of
indigenous crude oil, because nature did not bless us
with it, but we are clearly capable of producing most of
our food needs. What are needed mainly are focus,
political will and the resources for greater production.
With the economy exhibiting continued dynamism, we can
spur the rapid growth of our agriculture. The higher
prices for food will themselves be a factor for greater
investments in the sector.
The
critical lesson we must take from the food crisis—as
well as the energy crunch—is that we are at risk by
being overly dependent on the global market. And nowhere
are the risks greater than in the food crisis, because
the challenge is elemental. It affects the most
vulnerable among us—the millions of our poor. It can be
the difference between life and death.
It’s a
good thing that the government and the private sector
are meeting the challenge soberly and thoughtfully. Good
ideas are being put on the table. The government is
doing its part to stabilize the situation. And even the
opposition has realized that this is not a time for
wisecracks and showboating. |
