Insufficient

First a rice shortage was reported in Zamboanga City, Sulu and Tawi-tawi. Now, according to reports, only two days of supply is available in Batanes.

The two areas are suffering shortages for very different reasons. In the south, the shortage is blamed on the choking of rice exportations from Malaysia. For years, the area was supplied with rice by way of the barter trade – which is, bluntly, a form of tolerated smuggling.

In the case of Batanes, the problem is simpler. Weeks of inclement weather prevented ships from bringing in rice supplies. For obvious reasons, Batanes is not a rice-producing area.

The authorities assure us there are sufficient stocks of rice in the country. The problem, they tell us, is entirely logistical.

Things are a little more complex than that.

Each time a rice shortage or a spike in the price of the vital commodity happens, one or the other usual suspect is picked out for blame. Sometimes, the usual suspect are the rice traders who are said to be hoarding stocks in anticipation of rising prices. At other times, it is the incompetence of the NFA to blame. The agency imports rice too late, acting only when a shortage looms.

True, they compound the problem. But they do not cause it. Those who hoard are responding to market stimulus. The inefficient NFA, for its part, ought to have been abolished years ago.

Problems of rice supply and pricing are only the tip of the iceberg. At the bottom is a screwed up agricultural policy that keeps us from being self-sufficient in anything. When people are smuggling rice, onions and garlic, there surely must be a problem.

Now we import round scud, often called the poor man’s fish. The importation was supposed to be a concrete measure to fight inflation. But it sparked resistance from our fisher folk who went to the extent of spreading fake news about the imported fish being contaminated with formalin.

Agriculture Secretary Manny Pinol counters the nonsense. He says the fish, whether imported from neighboring countries or delivered by our fishermen, are from the same sea. They have no nationality.

Pinol should have continued to say that the problem is inefficiency in our fisheries. If round scud is fished from the same sea, why are our neighbors able to sell the fish to us at a significantly lower price?

The answer is that their fisheries are simply more efficient. Their fleets are better capitalized, enabling them to catch more fish using the best technologies there are.  Their fleets move with reefers and canning facilities that enable them to process their catch at sea, substantially reducing spoilage.

Rice is particularly problematic.

For decades, we pursued market unfriendly policies. We cut up the land and redistributed small plots in the name of social justice. We never invested enough in irrigation. We did not embark on a program of capitalizing agriculture. We prevented free trade in the commodity. We never adopted a land use plan to conserve the best-irrigated land from conversion to other uses.

On top of it all, we established a heavily subsidized agency to constantly push down rice prices and therefore impoverish the farmers. That agency, apart from heavily infested by corruption, is now heavily in debt. That debt will be charged to the public account.

When we joined the WTO, we bartered protection for our nascent industrial base in order to continue restraints on rice trading. We paid a heavy price in terms of opportunity cost to maintain an irrational domestic rice policy.

The sum of decades of wrong-headed rice policy now articulates in severe structural problems. Our rice farmers are now aging and their children would not want to succeed them in planting a thankless crop. Rice production is a poverty trap.

Broken up into small “family-sized” plots, our rice production is resistant to mechanization. That compound the original problem we have deriving from our being an archipelago: we have small and unreliable rivers to irrigate a water-intensive crop. There is no way we can be cost-competitive with the mainland economies of Thailand, Vietnam and India. They have large rivers they can rely upon for irrigating their fields.

Unable to mechanize our rice farms, we were content to subsidize reproduction of carabaos. That only pushed us deeper into the mud.

In order to produce more rice on less land, we experimented with fertilizer-dependent varieties. That did not improve our cost-competitiveness. It did not enhance our rice self-sufficiency either.

For years, we reneged on our WTO commitments by keeping quantitative restrictions on rice trading. The sheer price differential between imported and locally produced rice made smuggling a persistent problem that made a few traders wealthy and our rice farmers poor.

We know rice pricing is a political flashpoint. In 1995, government delayed importation to avert political backlash from the farming communities during an election year. The result was rice rationing. The building public anger expressed not only in adverse electoral outcomes for the administration but also in rioting sparked by the Flor Contemplacion episode.

The NFA, whose task ought to have been limited to ensuring adequate buffer stocks, has now been expected to supply the public cheaper rice. The agency is now bankrupt. It now requires larger and larger subsidies to buy supply.

Yet, our politicians have dragged their feet on shifting to a tariff regime for rice, fearing a backlash from our farmers. Rice is such a politicized commodity it stymies all efforts to shift to a more rational, market-friendly regime.