A hundred years of rice crises

EYES WIDE OPEN - Iris Gonzales - The Philippine Star

It’s as if we’re in a novel, in a land of enchantment, inflicted with a generational curse from a mischievous mythical creature or a disavowed fairy as we find ourselves facing another rice crisis.

Indeed, we’ve been having rice problems for more than a hundred years now. Way back in 1919, the Philippines experienced a rice supply crunch, which led to massive starvation, no thanks to poor harvests and greed of rice landlords.

Decades later, in 1930, triggered by the Great Depression in America, the country experienced a daily shortage of rice; social unrest erupted.

Now, 104 years later, here we are still trying to solve our rice problems. Between then and now, there were many other dire situations involving the commodity.

Says a June 1, 1949 article by American professor J. E. Spencer about the Philippines’ rice situation:

“The most constant headache in the current Philippine material economy, and one of the most common topics of conversation throughout the islands, is the problem of rice. Hundreds of opinions are being rendered as to the best solution. There is little question that it can be solved. The three principal topics of discussion are: growing more rice, importing more rice and controlling the distribution, price and sale of rice. Criticism is leveled at the farmer, the rice trader and the government.

“In point of fact, the Philippines has not fed her own population since late Spanish times.” (Spencer, Far Eastern Survey, June 1, 1949).

Today, the same throbbing headache continues to hurt us.

President Marcos had promised to bring down the price of rice to P20 per kilo but it was a promise that was impossible to fulfill, especially because the era of cheap food is over.

Global factors – the pandemic, supply chain issues and a rice export ban by India – have all aggravated the situation.

As a result, the price of the grain is almost out of reach, especially for the poorest of the poor.

To address the situation, President Marcos issued EO 39 imposing a price cap of P41 per kilo for regular milled rice, while well-milled rice will have a price cap of P45 per kilo.

It’s a controversial move, which took effect last Sept. 5; rice retailers said they have no choice but to defy the EO. Their losses are piling up, they said.

The law of supply and demand

With the EO, the government is messing with the law of supply and demand. Perhaps the President and his advisers deemed the problem of skyrocketing rice prices as a desperate situation that called for a desperate measure; estimates showed that the price of rice may hit P75 per kilo.

Socioeconomic Planning Secretary Arsenio Balisacan, also an agriculture expert, said there is an artificial shortage because the price of rice has been sharply increasing over the past weeks. This can only be because of hoarding.

The upcoming harvest season, he said, starts soon and there are also additional import orders, which means we already have enough rice for the rest of the year.

“And yet, the price of rice has been sharply increasing over the past weeks, which is inconsistent with the apparent supply and demand situation. This implies that some are depicting a shortage at this time,” Sec. Balisacan said.

Thus, he said, the imposition of a price ceiling on rice would address skyrocketing prices of rice in two ways: “(1) it will immediately reduce the price of rice and (2) it penalizes and consequently discourages hoarding, further decreasing the price of rice.” I fervently hope we meet these two objectives.

Win-win solution

House Speaker Martin Romualdez said he would continue to speak with rice retailers to address their fears that the rice price ceiling ordered by the Palace would make them lose money.  A win-win solution would be discussed, he promised.

One option that the House leader is looking into is to provide aid or ayuda to the retailers who will be affected by the EO.

“We have to talk to them to come up with a win-win solution wherein they won’t be adversely affected by the price ceiling,” he said.

Time will tell what happens next and how long the government can implement the EO. It’s a desperate measure but I hope it’s only temporary.

And while this is happening, law enforcement authorities must continue to crack down on the powerful rice cartels.

With billions in intelligence funds available to authorities, it should be easy to identify these unscrupulous traders, as well as their backers in high places.

Rice is a political issue and while the EO may provide a temporary solution to skyrocketing prices, price ceilings in general translate to losses in any economy.

Moving forward, President Marcos, our agriculture secretary, must also focus on implementing lasting solutions to solve our rice problem. These may include helping farmers boost productivity, fixing irrigation systems, providing post-harvest facilities, breaking the cartels and supporting supply shortfalls through imports.

Unless we really focus on long-term answers, our rice-related issues will persist. We don’t want a hundred more years of rice crises, do we?

What we all dream of is the country’s golden age – a period where life is good and food is plenty. I would want a hundred years of that for sure. And even more.

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Email: [email protected]. Follow her on Twitter @eyesgonzales. Column archives at EyesWideOpen on FB.

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