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Saturday, June 22, 2024

Let’s get real

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“The SBAC also refused to look into what could be regarded as the ridiculously low bid of SMS Global Technologies-Sequent Technologies”

Bigas na naman!

The first quarter surveys tell us a very clear political and economic situation: the public’s biggest concern is food inflation, particularly — rice.

Solutions always begin with defining the problem. And the best way to do that is by looking at the numbers.

In the mid-seventies, when we were under an authoritarian system, we did achieve rice self-sufficiency, which as the numbers later showed, was achieved at a huge cost in terms of government subsidies and unpaid loans that broke the back of our rural banking system.

So compare the numbers then, and now. In 1978, we had a population of some 44 million; Thailand had 43 million, roughly equal. Today we have 114 million, while Thailand, because of pro-active population management, has 71 million.

Thailand has all of 51 million hectares, plenty of flat land in a mostly contiguous whole with great river systems. We are all of 31 million hectares, dispersed in thousands of islands, with few large rivers as source of irrigation water.

Thai and Vietnamese students went to our UPLB and the IRRI in the 60s and 70s to learn agricultural techniques which they studiously implemented.

With more mouths to feed, we need to produce more food. But we have limited land suitable for rice. We have only a few, mostly shallow rivers to draw water for irrigation.

Then Senator Bongbong Marcos, in a budget hearing of the DA in 2010, asked the NIA how many hectares of irrigated land we have. The answer was a tad more than 1.5 million hectares.

The senator was bowled over, recalling that in his father’s time, we had 1.4 million hectares of irrigated land. The incremental gain in more than two decades was that small.

For years and years, from Macapagal and Marcos I through Macapagal II to the present Marcos II, our leaders chanted about self-sufficiency in rice.

Still, “rice is life,” or so they say. Food security is national security as well.

Realizing the awesome disequilibrium between population versus land area, market economists have pushed for doing away with quantitative restrictions on rice imports which gave government a monopoly through the NFA.

Due to huge annual government subsidies, free trade advocates wanted to give the rice trade entirely to the private sector, leaving the NFA to mere buffer stocking for use in calamity relief.

And in late 2018, using a rice shortage and price spike caused by inefficient inventory control, they got Congress to rush the enactment of the Rice Tarrification Law.

Using the proceeds from a 35 percent tariff for ASEAN-sourced imports, they generated 10 to 14 billion pesos annually since 2019 which was earmarked for production support to our fast aging farmers.

In its first year, RTL tamed consumer prices, but by 2021, the imbalance between demand and supply made rice more expensive, even as the volume of imports increased considerably.

And in 2023, the world supply for staples constricted, so 3.2 million tons of imports could not stabilize prices.

Despite the Rice Competitiveness Enhancement Fund drawn from the tariff imposed on huge import quantities, and despite the 2023 middling market intervention of the resurrected Kadiwa to bolster the chimera of 20-peso-per-kilo rice, all efforts failed at stemming the price, which at its lowest and worst quality is 45 pesos and more edible is 60 per kilo.

Our HoR now wants to return the “good old days” of huge government losses from subsidies, their bleeding hearts chanting the mantra — “rice is life.”

RTL’s principal authors, economist Stella Quimbo in the House, and realtor Cynthia Villar in the Senate are losing support in their chambers, at a time when PSA and opinion surveys point to rice as the biggest culprit in inflation that has fueled massive disenchantment with the current government.

So now the same legislators who rushed RTL with the promise of rice security are rushing its dismantling with encouragement from an embattled presidency.

This is so typical of Congress. It has a history of reaction; rarely does it analyze the problem well, and almost always, it never pro-acts because it has an “august” dislike for studying the numbers.

Bueno, vamos a ver.

Eerily silent are our newly-minted finance secretary, Ralph Recto, and our agronomist NEDA DG Arsi Balisacan on this RTL volte face. We await their response with bated breath, and how Cynthia and Stella try to stem the tide in their houses.

Lastly, how the final legislative compromises are ironed out, and more, whether or not these will redound to lower prices amid the political turmoil as we run into another election season.


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