Coping with the food crisis

Coping with the food crisis

The food crisis is real and will last for a long time. The more we inject less politics to it, the less will be our problems coping with the food crisis. The shortage of food is worldwide. Rice, corn, bread, milk, pork, chicken and beef will cost much more than you can ever imagine, assuming they are even available.

You will see long lines of people buying their staple food. You will see boycotts, riots, and governments being overthrown. Food price inflation has reduced considerably people’s purchasing power. In Manila, the rice that could be bought for just P18 a kilo last year is no longer available, unless you pay P30 a kilo, a 66 percent increase.

The Food and Agricultural Organization (FAO) rice price index (with 2000 as base year) reached 142 in October 2007, the highest in 20 years. In 2007, the rice price index was up 16% over 2006. Yet, says FAO, the rise was small compared with agricultural commodities such as wheat and dairy products.

The aromatic Japonica rice rose 24%, reflecting limited supplies in India and Pakistan. Export prices of lower quality Indica rice were up 18%. Major rice producers China and Pakistan have increased prices while large exporter Vietnam has restricted exports. India, a key player in the international rice market, has imposed an indefinite ban on export of non-basmati rice and pegged its minimim price at $425 a ton.

FAO predicts that “unless the sizes of the crops soon to be harvested are much larger than currently foreseen world rice prices could undergo further increases in the next few months.”

Global paddy production was estimated in 2007 at 643 million tons (429 million tons in rice terms), up marginally over 2006. World average paddy yield remain at 4.1 tons per hectare. In Asia, paddy production was estimated in 2007 to be 585 million tons, up just three million tons.

Bangladesh, China, India, Indonesia, and Myanmar showed a large production gains in 2007 but Japan, the Philippines, Sri Lanka, Turkey and Vietnam suffered contractions, says FAO.

Rice available for trade is now limited, 30 million tons, a measly 1.7% increase from 2006. Egypt imposed an export tax on rice, India restricted non-basmati rice export, VietNam imposed export quotas.

FAO notes increased imports by Bangladesh, North Korea, Indonesia, Nepal and the Philippines “which would help them overcome severe domestic supply shortages, and in some cases, would be reaching them in the form of food aid.” Thailand is the only country with ample rice supplies for export.




West Bengal and Mexico have had food riots. India, Yemen, Burkina Faso and other countries are seeing signs of food riots. Australia ousted its prime minister this year after a ten-year drought that devastated that country’s wheat crop.

In the Philippines, 16 million Filipinos said they missed a meal at least once in three months last year. That happened when rice was still P18 a kilo. Even at that price, there was a shortage of eight percent (or one million tons) of total demand for rice. That’s the official estimate before the crisis erupted. After the crisis, the government of President Arroyo ordered 1.5 million tons of rice from Vietnam and is tapping additional supplies from Thailand. The shortage, more likely, is more than two million tons valued at $1.4 billion (P58 billion) at current rice price of $700 a ton.

The Arroyo government, already under siege following allegations of lying, cheating, and stealing, will have a difficult time delivering what it cannot deliver –food on every table, which she promises to do by the end of her term. What will happen is that with her heavy infra spending you will have beautiful roads where no food trucks will pass through simply because the provincial harvest has not been enough to load into trucks to service food-starved urban areas like Metro Manila.

To me, what should be done is put a stop to everything that is being done –building roads, power plants, industrial zones, high-end villages – and focus on just one thing – produce food. It can be done.

If a 50-km first class highway like the Clark-Subic-Tarlac Expressway can be built at a cost of P27 billion in less than two years, there is no reason why we cannot open half a million hectares of new ricelands for probably same amount of money. We have plenty of idle lands. The government alone has two million hectares; the private sector more so. Don’t worry. There is plenty of kickback money in agriculture. Jocjoc Bolante has proved it, with his irrigation scam (more than P700 million disappeared). Cito Lorenzo’s Quedancor has proved it with its swine scam (more than P1.5 billion disappeared).

What we can do is allow the bureaucrats to steal and steal big, as long as they produce rice, the staple food of Luzon, and corn, the staple food of Visayas and Mindanao. Anyway, even if the bureaucrats overprice rice projects by 100 percent, the price of rice will double in the next five years, if not earlier. So today’s greed will be cured by time, just so people will have something to eat. Greed is the opposite of hunger. And usually during crises like what we have now, they remarkably go in tandem to meet a need like food.

It takes P100,000 to irrigate again every hectare of rice land. Some 400,000 hectares of rice lands need to be rehabilitated with new canals and mini-dams. That will cost P40 billion. To open up new rice lands, you need P1 million per hectare with entirely new dams and irrigation systems. Each hectare produces 3.77 tons of rice. To cover the two million-ton shortage, you will need to irrigate 530,000 hectares and provide them hybrid seeds, fertilizer and plenty of water.

So there – P40 billion to solve the rice crisis. Overprice that by 100 percent and you will need P80 billion. How much did GMA collect from the E-VAT? P80 billion. So money is not a problem. Political will is. And greed.

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