It's fine to enumerate everything that we should have done: better farming methods, investments in irrigation, organizing the farmers to increase efficiency, rationalizing land use to prevent conversion of irrigated and irrigable lands, etc. etc.
Surely we should still pursue them, so that we can be sure that we always have enough to feed everyone. That's aiming for food self-sufficiency. This is not the only way to attain food security, since Singapore or Hong Kong without rice fields are more food-secure than we are. But then we cannot just convert lands for the more profitable industrial uses. A certain level of food sufficiency is our best guarantee in times like these when global food prices are rising or when there are disruptions to food supply (natural calamities, even those not affecting rice fields directly).
But then focusing just on the supply side is not enough, and worse, can lead to the wrong policies. The rice exporting countries of Thailand and Vietnam do not convert rice lands as much as we do. And unlike the Philippines they are better endowed in terms of natural irrigation, which means that they do not have to spend as much as we do to bring more lands under cultivation. Yet they are also affected by rising rice prices.
The reason is simply that with rising international prices of rice, farmers and businessmen naturally have the incentive to export rice. The only way to prevent them from bringing rice across international borders is for home consumers to offer the same or higher bid for rice, or to physically prevent them by using the coercive power of the state. This is exactly what the rice exporting countries are doing to mitigate the impact of rising prices on their poor. Yet preventing rice from being exported across countries further adds to the escalation of rice prices.
It is said that rice production in the Philippines has actually increased by 10%. Our population did not increase that much since last year, which means that the need to import has been partly mitigated by the net increase in supply per consumer. But even with increased production, there is every incentive to import rice as long as the international prices are lower than domestic prices. This is the situation before the escalation of rice prices. The anomalous thing is that the country has actually imported rice now that international prices are rising!
Suppose that under the new conditions in which the world price for rice is higher, the country is able to increase rice production. This is highly probable since the new higher prices would provide incentives for farmers to take more risks and invest more. The result is that there would be more rice available. But would rice prices go down? Probably not.
To prevent rice prices from going up, government can impose price controls or ban rice exports. Farmers and traders-financiers will be at a disadvantage and will feel aggrieved if they are forced to sell rice at a lower price than the world prices. Even if government imposes a policy of preventing the exportation of rice, our porous insecure borders would almost ensure that domestic rice will go where they can sell at a higher price. Which means domestic prices will remain high even after increased production is realized.
This wouldn't be a problem for the economy as a whole. Farmers and others involved in rice will earn more. The relatively well off consumers can absorb higher prices (as food expenditures as percentage of income is small for well off households and very high for the poor).
So, the poor who are not involved in rice production (or staple food production in general) will be hurt the most. They're hurting even before the rise in prices. They will starve under the new prices. The reason is they do not have the income to buy enough food. What the government is doing with the rice queues is to subsidize the price of rice for the poor, and regulating purchase per family to avoid hoarding of the subsidized rice. But this welfare assistance can continue only for the very poor. Not for the poor that can be brought up to help themselves, but still with help from the government.
How? Employ the poor so they can have incomes. What will employ them? Emergency infrastructure projects to improve irrigation, as well as other public works that enhance the chances of food sufficiency and competitiveness of the country in the future and the productive capacity of its citizens (as being healthy and skilled). Build those roads and ports and primary health facilities and schools and water systems and housing projects.
But how can we ensure that these public expenditures, which can be augmented also by official development assistance from abroad, will not go to waste and line the pockets of politicians and DPWH personnel? Establish new rules so that community infrastructure projects that local communities themselves have identified and which they are willing to work for and manage are the ones that get funded. Stop the habit of funding only the projects of bailiwicks of Malacanang's political allies. With more responsibility on the part of local communities, the value of infrastructure projects can be protected over time.
Beyond these and other possible course of action are things that we cannot directly influence. Hundreds of millions in China have risen from poverty and are demanding more protein in their diet. This increases the demand for grains as feeds for livestock (cows). There is also this maniacal obsession with biofuels that transformed lands for food production to crop farming for energy. And there are probably more and more reasons why demand for rice and cereals is rising, or how supply could not cope fast enough.
These economic changes have differential effects on different sectors. We can remain a viable society to the extent that windfall gains by some sectors can be used to support those that are effected adversely.
Employ the poor now for projects that help the poor now in terms of income that can accrue to them and in terms of an economy that can create more jobs in the future.
- I'm a community organizer and researcher.
Interested in the following:
cooperatives, unionism, new social movements, coproduction, publi
c utilities,municipal services, local governance, skepticism, radica l democracy,new institutional economics, evolutionary economics, evolutionary biology, cosmology physics, er otic art,protest art