OPINION: DECADES OF PROBLEMS FALL ON ART YAP
MANILA, APRIL 16, 2008 (STAR) DEMAND AND SUPPLY By Boo Chanco - I don’t know how Agriculture Secretary Art Yap feels about his present job but I am sure just waking up in the morning must now require a great amount of professionalism and patriotism. Somehow, decades of economic problems, decades of neglecting the agricultural sector, decades of not having a good population program and a new era of rising commodity prices have all combined in a perfect storm we now see as a rice crisis.
What can Art Yap really do in the short term? Nothing much except to make sure we have enough supply at any cost. There are no quick fix solutions to the problem. Actually, I don’t even think we have a rice crisis right now in terms of a shortage. The problem of this administration is as usual, it is losing the propaganda war due to its absence of credibility. Worse, Ate Glue’s press releases about some P40 billion being made available to produce more rice is giving the wrong impression that we can throw money at our problem and solutions will instantly materialize as in a vendo machine… making expectation and frustration levels rise even more.
There is something to worry about when government, out of panic, launches big budget programs to generate positive headlines overnight. I worry about the P15 billion announced to be available for microcredit to farmers. While such credit is badly needed, we will likely end up with another Quedancor hog raising scandal unless they have a good plan to properly distribute all that cash. The other question has to do with the absorptive capacity of the bureaucracy to productively take in such large amounts.
I have had enough conversations with Art Yap to know that he is the rare member of Ate Glue’s cabinet who has a long term view of how his sector must be handled. Art has enough business sense to know that the only way to drastically increase the country’s agricultural production is to make farming profitable for farmers. He knows the existing system of traders and usurers suck the lifeblood of farmers. He knows there are serious logistics and marketing problems that make farming unprofitable for farmers.
I have seen some of the pilot projects Art is implementing to address all that. But unfortunately for him, he must produce big results quickly. Small steps are nice but inadequate for our needs. As it happens, time just run out on Art Yap as the rice crisis fell on him like a ton of … imported rice. It is his unfortunate fate that something building up from decades of neglect, wrong policies and corruption happened in his watch.
It is like getting a heart attack. You have been smoking multiple packs a day, constantly eating lechon and other fatty food, drinking alcohol like there’s no tomorrow, has a stressful sedentary job, hardly ever seen a doctor or taken maintenance medicines but when the cardiac episode happens you are most surprised. As they say, the chickens do come home to roost.
Going back to rice, let us take it from an international expert.
Robert Ziegler, director-general of the International Rice Research Institute (IRRI), summed up the cause of the current rice crisis in these words: “The world has been eating more rice than it has been producing. We have seen for a number of years global rice stocks declining. And, of course, if your rice supply shrinks and demand grows, then you have an economic response—and that is higher prices.”
After a weeklong meeting of its board of trustees consisting of agriculture experts from various countries, IRRI distilled the main causes of the worldwide rice problem: population growth, leading to increased demand for more rice; production problems brought about by weather disturbances, such as storms and pest outbreaks; accelerated interest in biofuels and alternative fuels; conversion of prime rice farmlands from agricultural production to urban use; diversion of water from agriculture to other purposes; and reduced investments in agricultural research and infrastructure.
On all those counts, we simply had it coming… To fix the problem beyond the next lean season, we have to put a multifaceted program that will, among others, address runaway population growth, plan for consequences of weather changes, manage biofuels program to not compete for resources from food crops, stop conversion of prime rice farmland to other uses, vastly improve agricultural irrigation and increase investment in agricultural research and infrastructure.
In more specific terms, IRRI proposed six key points for both the public and private sectors. One, increase production to bridge the gap between actual yield and potential yield; two, accelerate the delivery of postharvest technologies, which includes storage, drying and processing of rice; three, accelerate the production of higher-yielding rice varieties; four, strengthen and upgrade rice breeding and research; five, accelerate research on the thousands of rice varieties around the world, including approximately 100,000 varieties in Asia where only 10 percent has been studied; and six, develop a new generation of scientists and researchers.
As we can easily see with the things we can do in the short, medium and long-term, the rice problem isn’t likely to be solved soon. But for today, tomorrow and the next few days, weeks and months, Art Yap’s problem is basically psychological… assuring supply.
Price is another thing altogether. In the international market, there isn’t much we can do to bring it down. On the contrary, our panic buying large volumes is feeding the price spiral. Every news item in the international press on the price of rice primarily blames the Philippines for the record high price of rice.
In the domestic market, price is a question of subsidies and police action. How much can government afford to lose in rice subsidies? Can law enforcement agencies adequately stop hoarding and price manipulation by the long established traders?
Someone in one of my e-groups in reaction to Art Yap’s comment that we don’t have a rice crisis but a rice price crisis wrote “Bakit naman kaya tumaas ang presyo? Hanep itong si Secretary Yap. Dapat sa kanya, pabalikin sa high school para ma-review niya ang law of supply and demand.”
Sa totoo lang, palagay ko alam naman ni Secretary Yap yung law of supply and demand which is precisely why he is assuring everyone that we have enough supply by showing all those bodegas full of it in the hope of moderating panic demand and rising prices. For now, we really don’t have a rice crisis. We have a 54-day buffer stock, ongoing harvests, and arriving importations. What we have is indeed, a rice price crisis. There is rice out there but because of low consumer buying power, people are lining up for subsidized NFA rice. That’s part of our chronic economic problems and mass poverty that’s beyond the exclusive turf of the Agriculture Secretary.
But, it is true, there is a shortage in our own rice production and that’s not something that can be solved in the short term. If it looks like Art is in crisis mode, it is because he is worried that if we are unable to import enough rice, then we will have an honest to goodness rice shortage and such a crisis will make the current headlines seem like child’s play.
I guess for now, Art Yap can only be judged on how he manages this year’s supply challenges. For so long as we have enough rice stocks in NFA bodegas that are distributed properly and Art Yap manages to implement measures to encourage more local production, he would have done his job this year.
As for the price, that is now a political decision, given the realities in the international market and the limits of our government’s fiscal health.
Chief News Editor: Sol Jose Vanzi
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