NO RESPITE FROM GLOBAL RICE CRISIS UNTIL 2010 - IRRI
LOS BAÑOS, LAGUNA, April 12, 2008 (STAR) By Marianne Go , Laguna – The global rice crisis is not expected to diminish until 2010 and may take from five to 10 years to finally settle down, according to the chairman of the International Rice Research Institute (IRRI).
Elizabeth Woods of the IRRI said “the problems related to rice production and supply in Asia over the past year or more are cause for serious concern.”
Woods assured the public, however, that the issue is not a cause for panic. “There are solutions and we can move forward,” she said.
Woods said IRRI and its research partners have “solved similar rice production problems in Asia in the 1960s and 1970s and we can do it again.”
She pointed out that the current crisis is caused by the short-term methods of some rice-producing countries that need to improve their own domestic production.
“We must all look for innovative solutions to address supply and prices,” Woods said.
IRRI has warned of potential civil unrest in the country if the government fails to provide cheap rice amid a sustained increase in prices over the past two years to near-record levels.
The institute also said rice prices are likely to keep rising for some time as production of the staple fails to keep up with soaring demand.
“Longer term demand-supply imbalance is clearly indicated by depletion of stock that has been going on for years,” the latest edition of the IRRI publication Rice Today quoted IRRI economist Sushil Pandey as saying.
“We have been consuming more than what we have been producing and research to increase rice productivity is needed to address this imbalance,” Pandey added.
As the price of rice hovers near record levels, many poor countries face the specter of riots by hungry people, according to IRRI.
Rice is more than just a food in the Philippines. It’s eaten at breakfast, lunch and dinner, sometimes by itself. The country’s estimated 90 million people consume 33,000 metric tons per day and the government is trying to contain a surge in prices of the staple by securing guaranteed supplies.
The cost of some local grains has risen more than 30 percent from a year ago and while there have been no signs of mass anger, consternation is beginning to set in.
Just seven percent of the annual global production of the grain, a staple food of more than three billion people mostly living in the developing world, is traded in the international market.
This was because rice was seen as a political commodity and governments strive to maintain large stocks to guard against large price swings, IRRI said.
The institute said it had convened a group of experts to draw up a list of what could be done to solve the crisis and they agreed that raising yields was the only long-term solution.
IRRI said the crisis was affecting both the urban poor as well as rice farmers who farm small plots that cannot produce enough even for their own family’s use.
“Although the current rising rice price was seen as beneficial for farmers who grow a reasonable surplus that they can sell on the market, poor farmers with small or no surplus and poor urban consumers will continue to lose out if the price continues to rise,” it said.
Philippine Rice Research Institute head Leo Sebastian urged governments to increase investment in agricultural research.
“(The) impact of technologies is a driver of increased rice production, whether a country exports or imports,” he said.
“But everybody is saying that investment in agricultural research is small or limited – and something needs to be done about this.”
A senior UN official, on the other hand, confirmed a global food crisis after meeting President Arroyo yesterday to discuss the impact of soaring prices, which have triggered unrest in dozens of countries.
“There is a world food crisis,” Kevin Cleaver, an assistant president in a department of the UN International Fund for Agricultural Development, told Mrs. Arroyo.
Cleaver said that “in some 33 countries there is now civil disturbance, food riots caused by food shortages and higher prices. This is one of the subjects we discussed.”
Analysts have warned that higher prices could trigger unrest in the Philippines, following rioting in countries such as Haiti and Egypt.
Cleaver said people were suffering because the “price of rice and food has increased and we discussed a little bit what to do about that,” adding he and Mrs. Arroyo had agreed the solution was to ramp up production.
The President has pledged to keep supplies of the staple grain available to every Filipino, drafting in the military to distribute supplies and cracking down on looters and hoarders.
Mrs. Arroyo said the government had a plan for better irrigation facilities, according to Cleaver. That would help in the coming year but the shorter-term problem was more difficult to cure, he said.
He added that the world had been taken by surprise because “most people have been complacent,” but said governments can take steps to avoid starvation.
Cleaver said the UN agency would finance a $66-million agricultural and rural development program for two of the poorest regions in the Philippines.
A ranking administration lawmaker proposed the holding of a rice summit among countries of the Association of Southeast Asian Nations (ASEAN).
“I think that ASEAN should meet as soon as possible to tackle how it can deal with the current food security situation in the region, considering that among its members are the world’s biggest rice producing countries,” Palawan Rep. Abraham Mitra said.
“It can also tackle how to deal with the rest of the world, the same way the group of petroleum exporting countries meet on how to deal with world demand,” he said.
Mitra suggested that the Philippines, which imports rice to boost domestic supply, should initiate the proposed dialogue on food security.
The country imports rice from Thailand and Vietnam, and other sources outside the ASEAN region, including Pakistan and the United States.
This year, it is scheduled to import two million metric tons (40 million 50-kilo bags), the biggest volume since the Marcos regime when the country attained self-sufficiency in the staple.
Mitra also said President Arroyo does not need emergency powers to handle the tight rice supply situation.
“She does not need those powers yet, because there is no crisis or shortage. What we need is to allow the executive the power to dispose of smuggled rice to flood the market,” he said.
On Wednesday, Mitra and other members of his committee received a briefing on rice supply from Agriculture Secretary Arthur Yap.
“He assured us that we have stocks enough for 59-60 days, and that more supply is coming in because of the harvest season and additional importation. So there is no need to resort to panic buying. There is no need for traders to increase prices,” Mitra said.
A report Yap submitted to the committee showed that as of April 1, the National Food Authority (NFA), traders and households had rice stocks totaling 1,943,7000 metric tons (38,874,000 50-kilo bags).
Since national daily consumption is estimated at 33,000 metric tons (660,000 bags), the inventory is good for two months, Mitra said.
Of the national inventory, 1.1 million metric tons or 55 percent were held by households, while traders had 411,900 metric tons or 23 percent, and the NFA had 397,600 metric tons of local and imported rice, or 22 percent.
The report showed that the April stocks were higher by 100,000 metric tons than last month’s level of 1.8 million tons and by more than 400,000 over last year’s 1.5 million tons.
The report was based on monitoring by NFA of its own stocks and those of private traders. On the other hand, the household inventory was based on a survey conducted by the Bureau of Agricultural Statistics.
Mitra said they were told that the stocks in the hands of consumers were mostly with “farming households since many farmers were keeping part of their harvest for present and future requirements.”
Yap’s report also showed that 192,800 metric tons of imported rice were being unloaded in various ports in the country or were in transit on April 1, while 700,000 metric tons in imports were yet to be shipped.
He said the imports, together with the coming harvest, would greatly boost supply and should stabilize prices.
Isabela Rep. Rodolfo Albano III shared the view that the country has enough rice supply and that prices of the staple have unreasonably gone up.
“We have a bumper crop in Isabela, which is the second largest, if not the largest, rice producing province in the country,” he told a news forum in Quezon City.
Albano said because of the bumper harvest, even foreigners are buying rice in the province.
The last resort
Increasing the prices of rice at a time when there is a looming food shortage is the last thing the NFA should do, Speaker Prospero Nograles said yesterday, Nograles urged the NFA that all available remedies should first be exhausted before increasing the price of rice.
“I don’t think this is a wise idea when the poor are sweating under the scorching heat of the sun lining up just for two kilos of NFA rice,” Nograles said.
He said the government should “cushion” first the spiraling prices of rice and other basic commodities before a price hike.
Even if there is enough commercial rice in the market, Nograles said prohibitive prices are forcing the Filipino masses to scamper for the low-priced NFA rice.
He said it is simply a case of “bad timing” on the part of NFA, even just for purposes of floating the idea, especially at this time “when the price of commercial varieties and most food products are getting out of control.”
Sen. Manuel Roxas II said the government is inviting trouble from the consuming public with its knee-jerk reaction of raising rice prices.
He said the move created more panic rather than reassuring the public of stable supply.
“These are stoking the emotions of the people. It is clear that the government doesn’t know what it is doing. Until now, the administration has not acknowledged that we do have a rice crisis which affects Filipino families across the nation,” he said.
Manila Rep. Trisha Bonoan-David said the government must make use of the country’s “poverty map” to ensure that cheap rice from the NFA will go directly to the “poorest of the poor.”
David said there must be a “targeted distribution system” that would pinpoint only the depressed areas for NFA rice distribution, so that only the poorest can have access to cheap rice.
At present, the NFA’s buying price for palay is P17 per kilo.
The NFA said that even if the price of NFA rice is increased, the current P18.25 per kilo rate will remain in the 20 poorest provinces in the country as well as in government programs for indigents.
NFA Administrator Jesus Navarro earlier claimed maintaining the price of government rice too low would adversely affect local farmers.
NFA said it has already lost P43 billion since 2003 in rice subsidies.
On the other hand, the Department of Justice (DOJ) said the government can invoke Republic Act 3452 to address the rice crisis.
Justice Secretary Raul Gonzalez said the law, or An Act to Adopt a Program to Stabilize the Price of Palay, Rice and Corn, among others, can be used by President Arroyo to deal with the rice shortage in the country.
Under the law, the President can declare a “rice and corn emergency” to avert unrest amidst the looming food crisis, Gonzalez said. Jess Diaz, Delon Porcalla, Aurea Calica, Edu Punay, Katherine Adraneda, Jaime Laude
Chief News Editor: Sol Jose Vanzi
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