IRRI warns of likely regional crop shortage

Admit looming crisis on rice, solons tell Gloria

By Angie M. Rosales and Ruben Hortelano

03/24/2008

An impending rice crisis would be politically explosive if government fails to come up with effective solutions to prevent rice from being scarce, senators warned yesterday as they urged Malacañang to give a complete picture of the situation.

Senate Minority Leader Aquilino Pimentel Jr. said the government should present a plan to increase rice production instead of telling people to cut down on the consumption of the staple grain.

Pimentel said Agriculture Secretary Arthur Yap’s call to the people to cut down on rice consumption could only incite public anger.

“Yap’s advice to the people to reduce their rice intake reminds me of Marie Antoinette who, shortly before the French Revolution, famously said if the people had no bread they should eat cake,” Pimentel said in a statement.

He added such advice seems to betray his unfamiliarity with the eating habit of the typical, poor Filipinos who will not mind having no viand on the dining table as long as there is enough rice and some salt.

He said Yap’s call only contradicted his claim that there is no rice shortage in the country.

Pimentel said the Philippines still depends heavily on rice imports to make up for the deficiency in local palay production which belies the administration’s claim that “Ginintuang Ani” rice sufficiency program is reaping fruitful results.

Malacañang, however, continued to deny that the rice problem had worsened into a crisis saying blaming the opposition for spinning a yarn on the intensity of the situation.

Malacañang said the opposition should help plug “President Arroyo’s ship” instead of creating holes in it.

Presidential Management Staff (PMS) chief Secretary Cerge Remonde said the issue on rice supply is a problem that must be resolved by everybody including the opposition.

“The problem is something that should be solved by all. The opposition is equally responsible for the welfare of this country like all true statesmen. We only have one ship of state. If that ship has holes, we should all help to plug them instead of creating more holes,” he said.

The Kilusang Magbubukid ng Pilipinas (KMP) said Malacañang is hiding the truth about the issue of rice supply and expressed belief that a rice crisis in the country is imminent.

Last week, Mrs. Arroyo said there is no rice shortage but claimed that prices of rice will increase soon because of developments in the world market.

Even the International Rice Research Institute (IRRI) warned of a looming regional crisis on rice supply.

The rice supply shortage seems headed for a regional crisis as Vietnam, a major source of the staple food, is expected to have a drastic drop in output due to outbreaks outbreaks of pests and disease.

One of the world’s leading rice experts, Robert Zeigler, head of the International Rice Research Institute (IRRI) in Los Baños, Laguna, said Hanoi and the world scientific community have yet to find a way to prevent another crop failure following a virus attack on rice crops last year.

Vietnam is the fifth-largest rice producer and number three exporter in the world, and last year’s troubles hit some of the best rice-growing areas, Zeigler told AFP in an interview at the Institute.

“The fact is, they got taken by surprise and they had some significant yield losses that they were just not expecting,” he said.

“Of course we are concerned about Vietnam. But some of these pests can migrate up into China, and who knows if could they move up and cause some serious problems?”

He noted that, while China is not a key player in the international rice trade, the country is by far the world’s largest producer and consumer of the grain.

Vietnam also lies close to Thailand, the world’s top rice exporter, and rich rice-growing areas in Myanmar and Cambodia.

The Department of Finance (DoF), meanwhile, indicated a subsidy scheme on rice production is being considered instead of a proposed tariff cut on imports.

Finance Secretary Margarito Teves said the DoF is consulting with the Department of Agriculture on measures that the DOF can take to help ease a rice supply shortage.

Teves, however, said he got an assurance from the DA of adequate rice supply in the country.

“We will increase the tax expenditure subsidy on rice to be provided the National Food Authority (NFA) in consultation with Agriculture Secretary Yap.

This is in lieu of a tariff rate cut,” Teves told reporters before the Lenten holiday.

The government is also discussing proposals to allow private importers to buy rice at a reduced rate, he quickly added.

Teves said rice importers presently pay a 50-percent tariff for the commodity for which the National Food Authority has built a 55-day buffer stock equal to 1.8 metric tons.

The rice stock was on top of an estimated 7.2 million metric tons to be harvested between April and May this year, Yap added.

The expected dry crop harvest in the first half should hit seven million metric tons from only 6.7 million metric tons last year, he said.

Opposition Sen. Loren Legarda proposed the use of two multibillion-peso funds over the next two to three years entirely, if not almost exclusively, for projects that would immediately advance rice production.

She was referring to the Agriculture and Fisheries Modernization Program, which has an annual allotment of P17 billion, and the Agricultural Competitiveness Enhancement Fund, which had a cash balance of P6 billion as of Dec. 2007.

“These funds can be tapped to enable rice farmers to achieve greater productivity via exceptionally potent seeds, greatly improved irrigation, or with adequate water-impounding structures and other drought-mitigating measures.

“The funds can also be used to build up post-harvest facilities, so as to curb extensive losses due to inefficient rice processing, particularly in the drying, milling and storage stages,” added Legarda, also chairperson of the Senate rural development and social justice committee.

“The billions of pesos should now be used, at least temporarily anyway, primarily to consciously enlarge rice production, instead of supporting an assortment of agricultural activities with a few millions here and a few millions there,” she added.

Sen. Manuel Roxas II criticized Malacanang for continuously denying the imminent food shortage crisis, even belittling it despite reports on the matter.

“Mrs. President, be a force for good by getting real. It would be better to tell the truth about the problem to apply the best solution for it instead of downplaying the crisis but later on the nation would find rice and other commodity prices soaring,” Roxas, chairman of the Senate committee on trade and commerce, said.

“The government is in denial. There is a crisis in food supply. We learned that in Economics-101, prices of commodities will tend to rise if the supply is scarce. The price of rice per kilo is now from P24 to P26 from P20 to P22. This is because of a supply problem,” he said

“The government’s statement is contradictory – While declaring that we have no rice shortage, PGMA said prices would increase. How can this be? If there is no shortage, why will prices go up? Is it now the policy of government to make retail prices go up? Is the government now admitting that there is hoarding and manipulation and that it is helpless?” he stressed.

Roxas, Liberal Party President, said such contradictory statements cut the government’s

credibility and reduce its ability to marshal resources, including voluntary civic action, in order to combat the shortage.

In the meantime, he pointed out that other government offices also have issued statements conflicting with the President’s “no shortage” assessment:

• The DA has asked consumers to reduce their daily rice intake and urged fast-food chains to offer half-cup servings to consumers.

• The NFA hiked its 2008 planned rice importation to about 2 million metric tons from its original target of 1.2 million MT.

• The NFA further admitted that our regular sources of supply, Vietnam and Thailand, now cannot commit to providing their usual volumes.

• The NFA also announced it may avail of the East Asia Emergency Rice Reserve Protocol in order to secure additional supply.

A private group also said rice self-sufficiency program may be “if we will go into hybrid rice production in a more massive scale.

SL Agritech Corp. vice president Noel Mamicpic said if the government can allocate just P2.5 billion per year for the hybrid rice program, this would be enough for 800,000 hectares to be planted to hybrid rice which will produce an additional 3.0 million metric tons (MT) of palay.

He said the government’s massive investment in the hybrid rice program will have tremendous multiplier effects on the economy. “If we will multiply 800,000 hectares to four tons per hectare, this will be 3.2 million MT which can translate to two million MT of rice,” he said.

Mamicpic noted that while the government is spending more than P30 billion a year on rice importation, only so much is allocated for rice production and that less than 300,000 hectares of the 3.9 million hectares of the country’s total rice farms are planted to hybrid rice.

“Hybrid rice production is the best option to increase farm productivity,” he said, adding that “planting hybrid rice is benefiting not only thousands of farmers nationwide but our country as well.

Mamicpic said the solution to all this news about the looming rice shortage is for the government to give its fullest support to the hybrid rice program. “ Let us not allow to increase a one kilo of rice to a price of a one liter gasoline,” Mamicpic said, as he expressed optimism that the price of rice in the world market would not reach $1,000 per MT by the year 2010, as reported.

He said during President Ramos’ time, the price of imported rice was $180 per Mt; during Estrada’s presidency, it was $230 per MT; and now, the prices range from $618 to $740 per MT.

Roxas said holding a food summit to tackle the current rice shortage only add insult to injury.

“The oil summit came and went and we are stuck with even higher prices of oil with no relief in sight. Now, we have a food summit that would once again raise people’s expectations for a day or two. Summitry for PR and photo-op purposes is not the solution to our problems,” he said.

“Rice is an extremely sensitive political commodity. There is no question a big surge in the staple’s price is bound to spur social unrest and political instability going forward,” Legarda said.

“The only way for us to cope with the nearing rice scarcity. We should be self-reliant in the staple in short order. This is perfectly achievable,” Legarda said.

“Strong local production is the best remedy for any menacing deficiency. Ample supply is the surest way for us to ward off higher rice prices as well as broader consumer price increases that may be associated with rice price inflation,” she said.

Pimentel lamented that the Philippines is still heavily dependent on rice imports to make up for deficiency in local palay production. He said this belies the administration’s claim that its much-ballyhooed “Ginintuang Ani” rice sufficiency program is reaping fruitful results.

This year alone, the government is importing 2.1 million metric tons of rice from Thailand, Vietnam and other countries. The Department of Agriculture targets rice production to reach 17.33 million metric tons, equivalent to a national sufficiency level of 92 percent.

Pimentel said the NFA should beef up its rice stockpile by giving priority to the procurement of rice from local farmers, instead of relying too much on imports.

He noted that local farmers are always complaining that they are being ignored by the NFA in its rice procurement in favor of imports that only benefit the farmers from rice-exporting neighboring countries.

“The authorities find it more convenient to buy rice from other countries. Is it because they stand to gain a lot of money from this scheme?” the minority leader said.

Pimentel said it’s about time the government rethinks its rice procurement policy in the light of the tight supply and soaring prices of this staple cereal in the world market. From $295 per metric ton last year, the price of rice has shot up more than $500 per MT this year, reports said.

He said the government stands to lose a lot of money from the transaction because it has to sell the imported rice to consumers at subsidized, and low prices despite the expensive import cost of the commodity.

The minority leader said the problem is aggravated by the rampant practice of corrupt NFA officials to divert the agency’s rice stocks to grains cartels, which in turn, sell them at commercial rates of P26 per kilo or higher, instead of the authorized P18.25 per kilo.

Pimentel dared Secretary Yap to mount a relentless crackdown on NFA officials and employees, as well as grains traders, involved in the rice scam.

“He should get to the bottom of the illegal diversion and sale of NFA rice and punish the culprits whoever they are. Otherwise, people will suspect that he is involved or he is covering up this anomaly,” he said.

Pimentel said the magnitude of the problem is clearly shown in the diversion of 120,000 metric tons of NFA rice to grains cartels in Northern Mindanao.

Zeigler said the IRRI is monitoring the potential impact of the severe winter in China on its rice crops, both in the north where only one crop is grown a year and in the south where the usually milder climate allows for multiple planting seasons every year.

The troubles have helped lead to spiralling prices, with many nations relying on Vietnamese exports. Prices have soared to more than 700 dollars a tonne, more than three times the rate of five years ago.

Along with other disasters such as flooding in Java and a devastating cyclone in Bangladesh, the Vietnam troubles — a viral disease called tungro and infestations of the brown planthopper insect — have also led to global supplpies being drained.

Zeigler said it was still not clear why the pest and virus attacks had swept across the southern and central regions of Vietnam.

“We’re faced with a lot of unknowns,” said the American, who has headed the Institute — credited for developing high-yield rice strains in the 1960s that helped lift hundreds of millions in Asia out of poverty — since 2005.

“(Farmers) did shift varieties and they shifted the way they managed those varieties, and so we’re still trying to sort out whether it was some change in the strain or it was the change in the management practices, or both,” he said.

Zeigler said nations in the region and across the world needed to invest more in agricultural research, now that the vast yield gains seen since the 1960s have begun to flatten out.

“To some extent we can lay the blame ... on reduced investment in agricultural research in the last 15 years,” he said. The IRRI, first set up with funds from US foundations, is supported by government donors worldwide.

“Certainly the kinds of things that took (Vietnam) by surprise are areas of work that IRRI had to cut back on in the last five to 10 years because of budget cuts,” he said. With reports from Sherwin C. Olaes and AFP

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