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How they fought rice cartels, price spikes a century ago

GOTCHA - Jarius Bondoc (The Philippine Star) - August 7, 2019 - 12:00am

That the average age of Filipino farmers is 60 was reported two years ago, so the figure needs updating. Sons leave the tillage for easier work, perchance as municipio fixer, jueteng runner, or jitney barker. Farming is so neglected it has lost appeal. Irrigation and harvest facilities are scant, fertilizer and pesticide so costly. Farmers are at the mercy of middlemen. To please consumers, agencies import food rather than assist producers. Kickbacks are taken from paving farm-to-market roads.

In rice the government is set to boost farm yields and end imports, long overdue. But resisting change, appointees are into old moneymaking rackets. All the more farmers will be turned off. Many present mistakes had been committed before, and tested solutions forgotten. Authorities never learn.

A century ago US colonial officials encountered farm and food crises. From the Philippine Commission report of 1903 can be gleaned repeats of history: pestilence, rice price spikes, trade cartels, emergency imports, wastage. As background, some causes were similar: outbreaks of human and work animal diseases, unrest and counter-insurgency, and shortage of seeds and farm labor. Excerpts:

“In November 1902 the price of rice rose rapidly in Manila and the provinces, and information reached the Commission that a syndicate had been formed by certain merchants to corner this food of the people and to control its price. The situation warranted extraordinary action... On the 4th of November 1902 the Commission passed Act No. 495 ... appropriating $2,000,000 Mexican to defray the expense of buying and distributing rice at a reasonable price to the inhabitants... By the terms of the law the rice was bought and distributed for cash at a price which would cover all expenses. Subsequently the restriction as to price was repealed. In attempting to buy rice in Saigon, the source of rice supply nearest to the Philippines, the Commission was informed that supply there was exhausted. Application was made to the consul at Bangkok for Siam rice and also to the consul at Calcutta for Calcutta rice. It was found necessary to go into these distant markets because the syndicate evidently controlled the Saigon market.

“The purchases of rice, with the cost of storing, distribution, and wastage, did not prove to be profitable. An especially severe loss was suffered in the rice purchased at Calcutta. We bought there what was called ‘first-class famine rice.’ On arrival this proved to be an inferior quality of red rice, which soon developed weevils and in its deteriorating condition had to be sold at a considerable loss. It was probably necessary to go as far as Calcutta to break the corner, but it would have been wiser to buy a better quality of rice.

“None of the rice in question was given away; it was held in Manila and sent to the various provinces as word was received from the governors that the local dealers were raising the price of rice beyond what was reasonable. Our purchases in Siam and Calcutta broke the corner, and rice fell in price... A large part of the Calcutta purchase was sold to a firm having control of certain small coastwise steamers of small draft which plied from port to port and peddled out cargoes of the poor rice through Chinamen. The contract of sale forbade, under bond penalty, disposition of the rice at a price greater than $6.50 Mexican per picul of 137 pounds, plus actual cost of freight.

“The purchases of rice under Act No. 495 in Mexican money amounted to $1,815,974.81. And the sales amounted to 1,567,642.00. Loss from wastage and poor Calcutta rice: P248,332.81.

“...The loss to the Government, at the then prevailing rate, was thus about $100,000 gold. Considering that by this action rice at a reasonable price was secured to six million of people for one season when they were threatened with starvation prices, the money was not badly spent. The losses sustained by the syndicate who attempted the corner was sufficient to prevent another combination of the kind...

“Anticipating that the small rice acreage, due to the absence of cattle and other causes, would not be sufficient to furnish food for the inhabitants during the year 1903, the Commission passed an act to provide against the danger of famine dated Nov. 12, 1902, and numbered 517. It was made the duty of municipal presidents in all the towns to call meetings of the people ... to secure the necessary seed and to plant quick-growing crops of corn, camotes (i.e., sweet potatoes), rice, and other food plants. Each president was authorized temporarily to allot public land for planting seed and reaping the crop... Monthly reports of their proceedings under the act were required.

“...In parts of the islands the municipal councils exceeded their authority and made the failure to plant crops criminal offenses, and punished persons by imprisonment... From the last of January until late in August there was a drought in the islands of unusual length; and with the drought a pest of locusts came.”

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Catch Sapol radio show, Saturdays, 8-10 a.m., DWIZ (882-AM).

Gotcha archives: www.philstar.com/columns/134276/gotcha

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