Politics of rice

The recent Administrative Order from the Office of the President removing barriers to the importation of food products has again generated debates on different sides of the issue.

This debate on whether allowing importation in order to have cheaper food prices versus setting up tariffs for food importation in order to prop up the prices of local agricultural products to help the farmers is actually not a new issue. I remember around seven years ago, I wrote a column about an ongoing debate about the issue of rice importation and price stabilization.

I said then that the problem was determining whose interest comes first – the rice consumer or the rice farmer. At that time, I had read a discussion paper “Rice and Philippine Politics” written by two DLSU economists, Ponciano Intal and Marissa Garcia. They said that the rice policy debate can take two different directions. One direction is to ask how farmers can achieve satisfactory income when the prices are “too low.” On the other hand, consumers will ask how to purchase their staple food when prices are “too high.”

According to Intal and Garcia: “Consequently, no single price of rice can satisfy all consumers and producers.”

This debate as to whose interest will have priority, consumers or farmers, has made rice a highly volatile political commodity in Philippine politics.

Rice is the staple food of more than half the world’s population. In the Philippines, it remains the staple food of 80 to 85 percent of the population. However, in the lower income households, rice is not only an essential food but in many of these households, it is the sole source of calorie intake.

The availability of rice at low and stable prices has become an overriding objective for every government since the Philippine Commonwealth period. A rise in rice prices coupled with inadequacy of supply were contributing factors to defeat in some presidential elections. The image of people lining up to buy rice spells almost certain political defeat to presidential candidates.

Many countries in East Asia and Southeast Asia have tended to intervene in the rice markets through taxes, subsidies and market protection in order to protect the domestic rice markets from fluctuation in the international rice markets.

The Philippines has always been one of the largest rice importers in the world. Presently it is now ranked as the largest rice importer.

The deregulation of the rice business may seem logical but there are political consequences to be accepted.  In the short term there is no prospect of the Philippines achieving rice self-sufficiency. Even if this is achieved, imported rice will remain to be cheaper than domestically produced rice.

One of the biggest barriers to achieving self-sufficiency in rice in the Philippines is that there is a diminishing land base for agricultural purposes. Farmlands, including rice lands, have been converted to commercial, industrial, residential and recreational areas.

The southern Luzon region – Rizal, Cavite, Batangas, Quezon, Laguna – used to be a major source of rice and other food items for the Metro Manila area. Today, this region has rapidly become highly urbanized, with subdivisions eating up a lot of previous farmlands.

There are also intrinsic problems that hinder the growth of the Philippine rice industry. The countries in Southeast Asia that export rice have major river deltas and lots of land suitable for rice growing – Thailand, Vietnam, Cambodia, Myanmar. Thailand has almost four times the arable land per person than the Philippines.

Another problem for the Philippines is that it is located on the eastern edge of Asia directly facing the Pacific Ocean. This means it is subject to several typhoons and makes rice and other crop production risky ventures. However, the Philippines must strive to achieve a certain degree of food security. For this country to rely on other countries for its staple food is a dangerous situation. Other countries may suddenly decide to cease exporting and therefore make the rice supply in the country critical. The lack of this essential staple for the masses will cause political instability.

The government must follow a twin-pronged policy of allowing a certain amount of rice importation to stabilize domestic prices. At the same time, there must now be serious focus on increasing domestic rice production by providing much-needed infrastructure in irrigation, post-harvest facilities and new rice varieties.

The land reform program must go beyond simply distributing land. This must also include the provision of credit, technology transfers to land reform beneficiaries and organizing the small farmers into cooperatives.

In the Philippines, there must be an awareness that any proposal on a rice policy must accept that this cannot just be an economic policy. The Philippine government cannot continue relying on short-term solutions and postponing long-term solutions indefinitely.

Rice in this country is a very powerful and political commodity.

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