Economist: RP rice crisis due to bad policies, not shortage

05/22/2008

The rice crisis affecting the Philippines is not caused by a shortage of rice but due to bad policies that have hurt the agriculture sector, a leading economist said in a report released Wednesday.

“The so-called rice crisis is really an income crisis,” said Rolando Dy, executive director of the food division of the Manila-based University of Asia and the Pacific.

He blamed “under-investment in agriculture and infrastructure, a poor record in eliminating poverty (and) poor infrastructure quality,” for the crisis which has forced thousands of poor Filipinos to line up for hours for subsidized rice.

“We cannot reap what we did not sow. We failed in reducing rural poverty compared to other countries” such as China, Indonesia, Malaysia, Thailand and Vietnam, he said.

The Philippines is one of the world’s biggest rice importers and does not enjoy large contiguous land areas with large river systems

that allow China, India, Vietnam and Thailand to grow huge amounts of rice, Dy conceded.

But he said other countries which are more dependent on imported rice, like Malaysia and Singapore did not have long queues for rice and were not suffering from the crisis as badly as the Philippines.

Dy said that rice consumption in the Philippines was so high because much of its population was still poor and could afford to eat nothing else.

The Philippines could raise productivity but it had not properly invested in agriculture or its support infrastructure like irrigation and farm-to-market roads, Dy said.

He said the government was investing little in research and development, building sub-standard rural roads and not putting enough irrigation into potential growth areas like the southern region of Mindanao.

Dy also complained that an agriculture modernization law that took effect in 2000 was not getting adequate funding.

Graft and corruption also hurt the agriculture sector with rural infrastructure being built to poor standards.

Dy said that there is likely to be “some correction in rice prices in the next 12 months but not dramatically,” remarking that world rice prices will not return to levels seen in 2006.

But President Arroyo yesterday in Cagayan de Oro claimed that the country is more in a position to address the “global problem” of rice supply due to its sound rice management practices.

In her speech keynoting the 16th Association of Southeast Asian Nations (Asean) Farmer’s Week celebration at the Convention Hall of the Grand Caprice Hotel, the President said the Philippines had “seen” the rice supply problem coming and has been “heading it off for some time now.”

“On the issue of rice management, this is not only a national problem, this not only an Asean problem, it is a global problem that we have seen coming,” the President said. “In the Philippines, we have worked to head it off for some time now,” she added.

The President pointed out the Philippines’ rice management practices are based on three fundamental needs: supply, distribution and going against unscrupulous rice traders.

Because of the country’s stringent rice management practices, the President proudly said, “we have the supply issue well in hand.”

With AFP and PNA

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