Why RP, home to IRRI, is now the world's top rice importer
By Tina Arceo-Dumlao
Philippine Daily Inquirer
First Posted 02:21:00 04/25/2008
MANILA, Philippines—It is ironic that the Philippines, home to the International Rice Research Institute (IRRI) and some of the world's best agriculture schools, has become the world's top importer of rice.
The last time the Philippines produced enough of the staple to feed its people was 1994. Since then, the Philippines has been getting rice from other countries to cover for the shortfall and to tide the country over through the lean months of July, August and September.
Domestic palay – unmilled rice – production hit a record 16.24 million metric tons last year despite the midyear dry spell, but it was still not enough.
There are now 88 million Filipinos to feed. Rice and rice products account for 53.37 and 29 percent, respectively, of their energy, protein and iron requirements.
But because there was enough affordable supply in the world market to fill the Philippines' production gap of about 10 percent, the goal to again become self-sufficient in rice was relegated to the back burner.
And now, the Philippines, which consumes about 33,000 tons of rice a day, is literally paying a steep price for neglecting the rice sector.
During the last rice tender, the National Food Authority purchased 323,875 metric tons of rice at $1,136 a ton, sharply higher than the $708 a ton it paid in March and nearly three times the $430 a ton it paid in January.
Bigger cause for concern
The unprecedented surge in the price of rice in the world markets has been driven by the classic case of demand outstripping supply, thanks to a series of unfortunate events, including global population growth and the disruption of agriculture patterns due to climate change.
But the bigger cause for concern for the Philippines, which is scrambling to import as much as 2.2 million MT of rice this year, is the tightening supply of rice in the world market.
Pressed to stave off inflation, top rice exporters, including Thailand, Vietnam and India, have started to curb exports.
Vietnam, the world's third top exporter of rice, for instance, declared that it would cap exports this year at 4 million tons, from 4.5 million tons last year.
The cut in exports from India, the second top exporter last year, is even more dramatic with the volume expected to fall sharply to 250,000 this fiscal year from 5.5 million tons last year.
No choice but buy at any price
The clampdown on exports has led to the failure of the NFA to secure enough bids to cover tenders in December 2007 and January, March and April this year. Chances are high that the government will again fail to attract enough bids in May.
Given the ever tightening supply, the Philippines has no choice but to purchase the rice it needs at any price.
According to a 2006 study by the Southeast Asian Regional Center for Graduate Study and Research in Agriculture based in Los Baños, Laguna, rice accounts for 25 percent of the food expenses of the poorest 30 percent of the Filipino population.
"Rice prices, therefore, have a significant impact on the well-being of Filipinos, including the small rice producers, most of whom are net buyers of rice for household consumption," the paper said.
Catching up
The unabated increase in the price of rice to over P30 a kilo for commercial varieties and P18.25 for the rice imported by the NFA has thus suddenly made rice self-sufficiency and agriculture development the priorities of President Gloria Macapagal-Arroyo.
The Philippines certainly has a lot of catching up to do.
For a sector that accounts for close to 19 percent of the Gross Domestic Product and employs 35 percent of the labor force, agriculture has not received the attention and support that it richly deserves.
Data from the General Appropriations Act show that the Department of Agriculture only got an average of 2 percent of the annual budget over the past six years.
Price of agri neglect
The most that the department got to fulfill its mandate to make sure that Filipinos have enough to eat and that the sector continues to help drive economic growth was 2.4 percent of the budget in 2002, before dipping to 1.6 percent in 2005 and 2007.
This year is no different, with Congress allotting P24.7 billion for the agriculture sector, equivalent to a mere 2 percent of the total budget this year of P1.227 trillion.
Congress passed the Agriculture and Fisheries Modernization Act to enhance the global competitiveness of the agriculture sector in 1997 but it was not backed by the budget that it needed.
Now the country is literally paying the consequence of neglect, and beleaguered Agriculture Secretary Arthur Yap admits as much.
"Yes, we have neglected agriculture and it was only recently that we started to fund irrigation, seeds and post-harvest programs of the government," Yap told the Philippine Daily Inquirer (parent company of INQUIRER.net).
Emergency package
The emergency package of measures to address the country's food crunch by raising harvests of palay, corn and other food crops is summarized in the ambitious P43.7-billion FIELDS program unveiled during the April 4 food summit by Ms Arroyo.
The program will focus on fertilizer, irrigation, education and training of farmers and fisherfolk, loans, dryers and other post-harvest facilities and seeds of the high-yielding, hybrid varieties.
Agriculture Undersecretary Bernie Fondevilla said the FIELDS program covers the following:
• P500 million for fertilizer support, with special focus on the use of organic fertilizers.
• P6 billion for irrigation, with the goal of rehabilitating all irrigation systems by 2010.
• P6 billion for farm-to-market roads and other rural infrastructure.
• P5 billion for education, extension and training of farmers in new technologies, research and development on how to increase yields and lower production costs.
• P15 billion in loans and credit for farmers, fisherfolk and other small rural borrowers.
• P2 billion for dryers and other post-harvest support like storage facilities.
• P9.2 billion for hybrid and certified seed production and subsidies until 2010.
2010 target
The target is to plant certified seeds in 600,000 hectares this year and hybrid seeds in 900,000 hectares over the next two years.
The hope is that by implementing these grand programs, the Philippines would be able, as early as 2010, to go back to the glory days when it had enough rice to feed its people.
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