News Compilation April 8/9 regarding the ongoing rice crisis in Asia and the Philippines.
1. Lifting rice imports quota a step in wrong direction, will worsen crisis
2. Rice crisis to fuel calls for Arroyo’s resignation – solon
3. ‘Greater crisis’ seen in lifting of rice, corn import quotas
4. Thai PM urges calm as exporters see rice ‘crisis’
5. Fear of rice riots as surge in demand hits nations across the Far East
Residents buy rice while armed soldiers
6. Rice shortages heighten political crisis in the Philippines
Lifting rice imports quota a step in wrong direction, will worsen crisis – Bayan
April 8, 2008
The Bagong Alyansang Makabayan (Bayan) today called the Arroyo government’s move to lift the 300,000-metric ton (MT) rice import quota for private traders a step in the wrong direction that will aggravate the rice crisis.
The group argued that lifting the quota will not result in cheaper retail prices for consumers because rice imports are in fact more expensive now than local rice. “At current global prices, plus freight costs and tariffs, imported rice could cost an average of more than P40 per kilo. Worse, because more imported rice will now end in the hands of private traders, they will be in a stronger position to manipulate domestic supply and prices at the expense of hapless consumers. The end result is more expensive retail prices”, said Arnold Padilla of Bayan’s public information department.
Bayan argued that the move will also further weaken the National Food Authority (NFA) and strengthen the cartel of big private traders. “Remember that one of the reasons why local prices are escalating rapidly is the negligible intervention of the NFA as it accounts for only less than one percent of the of the domestic rice market. Furthermore, around 98 percent of the rice that the NFA uses to intervene in the market is imported”, Padilla pointed out.
Thus, allowing private traders to import an unlimited volume of rice will further undermine the already insignificant role that the government plays in ensuring local rice supply and reasonable prices, the group said.
More alarmingly, the lifting of the rice import quota shows the overall policy direction of the Arroyo government in terms of agricultural development, which is to rely on imports instead of promoting local food production for local consumption. “It has exposed Arroyo’s earlier pronouncements on improving farm productivity and achieving self-sufficiency in rice as empty rhetoric”, Padilla said.
The group noted that Ms Gloria Arroyo already said last week that food security does not mean self-sufficiency. “For Arroyo, there is no need to produce locally what the country can import from the world market, even if it is the staple food of most Filipinos. Such distorted concept of food security has exposed our people to the raging rice crisis”, argued Padilla
Bayan reiterated its call for the implementation of a price control mechanism to ensure that retail prices will not further soar due to hoarding and supply speculation. Aside from this urgent measure, there is also an immediate need for the NFA to substantially increase its intervention in the rice market, including in the procurement and distribution of rice. (END)
Rice crisis to fuel calls for Arroyo’s resignation – solon
04/09/2008 | 01:27 AM
MANILA, Philippines – A militant lawmaker on Tuesday warned that the rice crisis could intensify calls for President Gloria Macapagal-Arroyo to resign.
In a statement, Bayan Muna party-list Rep. Satur Ocampo said that government failure to address the crisis would agitate more and more people to call for the President to step down.
Ocampo added that Arroyo could be playing with fire if there was truth to claims that the “rice crisis” was just used as a ploy to divert public attention from accusations of graft and corruption hounding the government.
“Filipinos are getting fed up as they begin to understand that Ms Arroyo’s ouster from power is a way out of the increasing hunger and poverty, aggravated by the rice crisis,” Ocampo said.
He added that some sectors suspected that the present shortage in rice supply is a “fabrication” to divert public attention from scandals brought about by the botched $329.4-million ZTE-national broadband network project deal and the Joint Marine Seismic Undertaking in the Spratly Islands.
The lawmaker noted that the government has offered no concrete steps to lower rice prices three weeks since the rice-crisis issue cropped up.
“Arroyo’s move of lifting import quotas and increasing rice importation quotas of the private sector, will lead to greater crisis,” Ocampo said.
He added that lifting import quotas would hasten the otherwise slow death of the local rice industry caused by trade liberalization and importation policies.
“Any short-term measure to address the rice crisis may cause brief relief, but will not solve the problem on medium and long-term basis. Only policy reversal and sustained pursuit of food self-sufficiency can do that,” he said. – Fidel Jimenez, GMANews.TV
‘Greater crisis’ seen in lifting of rice, corn import quotas
By Maila Ager
First Posted 16:09:00 04/08/2008
MANILA, Philippines — The government’s decision to lift the import quotas on rice and corn might result in a brief respite but would later lead to a greater crisis, a lawmaker at the House of Representatives warned on Tuesday.
House Deputy Minority Floor Leader and Bayan Muna Representative Satur Ocampo’s warning came a day after President Gloria Macapagal-Arroyo approved the lifting of rice importation by the private sector to address the global shortage of rice supply.
“Ms Arroyo’s so-called solutions, like the lifting of import quotas and increased private sector importation, will in fact lead to greater crisis,” Ocampo said in a statement.
“Any short-term measure to address the rice crisis may cause brief relief but will not solve the crisis on medium and long-term basis. Only policy reversal and sustained pursuit of food self-sufficiency can do that,” he said.
Ocampo said the lifting of import quotas was also a “sure-fire way to hasten the slow death of our local rice industry which has long been bearing the rapacious impact of rice trade liberalization and importation.”
With the Philippines’ one million metric ton average rice importation since 1995, the country has actually imported over and above the minimum access volume under the World Trade Organization’s Agreement on Agriculture, Ocampo said.
The WTO compels the country to import three to five percent of domestic consumption whether or not it produces rice sufficiently, he said.
Ocampo also warned that the President’s failure to effectively address the rice crisis “because of her wrong food security policy” would add ground to the people’s mounting calls for her ouster.
“The Filipino people are getting fed up and now begin to understand that Ms Arroyo’s ouster from power is a way out of the increasing hunger and poverty aggravated by the unabated rice crisis,” the Bayan Muna lawmaker said.
Arroyo’s continued push for neoliberal globalization, Ocampo said, was also to blame for this rice crisis.
“The twin policies of unbridled rice importation and land-use conversion are among the major reasons for the decline in our food productive capacity,” he pointed out.
Thai PM urges calm as exporters see rice ‘crisis’
Sri Lanka Daily News
THAILAND: Thailand, the world’s leading rice exporter, insisted Friday it had enough for domestic consumption but exporters warned of a crisis, as dealers hoard rice to sell overseas at current sky-high prices.
Prime Minister Samak Sundaravej tried to reassure the nation that the rapid rise in global prices, which have also driven up the cost at home, would not cause a shortage on local shelves.
He said the soaring prices had sparked panic buying, but insisted the country had ample rice reserves.
“It is impossible that there will not be enough rice for sale. News reporting makes people panic, causing people to buy 10 bags instead of one or two bags,” Samak told reporters during his weekly briefing.
“High prices now are due to supply and demand, and it will be like this only for this period,” he said.
The benchmark Thai variety, Pathumthani fragrant rice, was priced Wednesday at 930 dollars per tonne, up 52 percent from a month earlier, according to the Thai Rice Exporters Association. The group’s price survey is updated weekly.
Other rice-producing countries including India and Vietnam have announced export curbs to ensure domestic supplies, amid warnings from experts that governments in Asia could see public unrest if prices remain elevated.
Thailand has not announced any cut to exports but said Wednesday it would release 650,000 tonnes from government stockpiles to sell locally at below the market rate.
Exporters say, however, that their own stocks are running low, blaming mills and middlemen for hanging on to supplies in the hope that prices will keep rising in the near future. “The rice situation at present is in crisis,” said Korbsook Iamsuri, secretary general of the exporters association.
“Exporters are facing trouble because their rice stockpiles are running short, while no more rice is coming to fill the stocks. Few rice farmers have any stockpiles because most of them have no silos for storage,” she said.
“Currently, rice is most likely in the hands of middlemen and the mills,” Korbsook said.
She estimated that one million tonnes of rice was now held by exporters, who were still waiting for rice from the current harvest which should already have started arriving in larger quantities.
“Rice prices are abnormally unstable.
They are shooting like rockets and changing swiftly within a week,” she said. Korbsook said that while growing global demand and a shortage of supply were driving prices higher, the increases should happen at a slower rate.
The association has not made any demands of the government yet, but industry groups plan to meet Saturday with commerce ministry officials to discuss ways of addressing the situation, she said.
Bangkok, Sunday, AFP
Fear of rice riots as surge in demand hits nations across the Far East
Residents buy rice while armed soldiers
Armed guards for rice deliveries will become a common sight in many countries in East Asia
Leo Lewis, Asia Business Correspondent
Any farmer in the Philippines caught hoarding rice risks spending the rest of his life in jail for the crime of “economic sabotage”.
Meanwhile, on the streets of Jakarta, Indonesia, thousands of makers of traditional tempeh soyabean cakes strike in protest as their livelihoods are destroyed and their countrymen starve. In Malaysia, where immense palm oil plantations stretch as far as the eye can see, panic buying of palm oil has stripped stores bare.
Chinese, Korean and Japanese companies are preparing to compete in a desperate “land grab” for agricultural land across the globe. Japan already owns three times more farmland overseas than in its home territory; Seoul is keen to do the same.
For Asia’s 2.5 billion people who depend on rice, these are anything but isolated incidents. They are what happens when huge sections of society move into the cities, when farm productivity growth halves over two decades and when bad weather or disease exposes fragile dependencies on the exports of a few nations.
* Asia stability threatened as rice dwindles
* Rice supplies set to fall to 25-year low
They are also the result of the harsh economics of industrial growth. The dramatic improvement in lifestyles and family finances of millions of Chinese and Indians has driven a demand for meat, milk and cooking oils that did not exist a decade ago.
The more than doubling of China’s average meat consumption since 1985, for example, has created an equivalent leap in demand for animal feed.
The US Department of Agriculture believes that the world will suffer a 29 million tonne discrepancy this year between what it needs to feed itself and what it can actually produce. Markets have been quick to recognise this and the traditional Asian staples of soyabeans, palm oil and pork have all soared.
Many grain and edible oil markets have also been squeezed by what some observers believe is an unsustainable conflict between cars and stomachs. Land that might previously have been used to feed people is increasingly planted with crops designed for conversion to biofuels, forcing unexpected rises in the prices of everything from tofu to instant noodles.
But perhaps more unsettling has been the suddenness with which Asia’s exposure to a food crisis has emerged. Countries that, until a few weeks ago, could rely on substantial imports of rice from India, Egypt or China are scrambling to cope with a new reality in which they cannot do so.
Nations such as Japan and South Korea that were running food economies with small self-sufficiency ratios have taken only a few weeks to react bitterly to the new situation as the world’s food stocks-to-consumption ratio plunges to an all-time low.
India – which traditionally has exported millions of tonnes of rice – has decided to set aside a special strategic food reserve on top of its existing wheat and rice stockpiles. Vietnam, the world’s third-largest rice producer, has been forced to curb exports and Cambodia has banned them completely.
In Thailand, the world’s largest producer of rice, rising concerns of a shortage have sent rice prices more than 50 per cent higher over the past month. When Samak Sundaravej, the Thai Prime Minister, appeared on his weekly television cooking show over the weekend he told Thais there would be “enough rice for the Kingdom”.
It was not a message designed to calm nerves elsewhere in Asia where Thai rice exports are an essential part of the diet.
Amid these highly visible signs of government-level panic, Asian countries that have rarely faced severe conflicts of “resource diplomacy” are accordingly readying themselves for showdowns.
Analysts give warning of governments across the region resorting to a “starve-your-neighbour” policy in an effort to becalm rioting domestic populations, and the UN International Fund for Agriculture has previously said that food riots will become commonplace.
In the Philippines and Sri Lanka, both nations that are heavily dependent on rice imports, politicians and business leaders are racing to strike deals with the likes of Vietnam and even Burma in their bid to secure rice supplies.
Troops and special police are expected to be used in the process of distributing rice to regions where supply was never an issue.
Feeding the world
33% Rise since January in price paid by Philippines for rice from Vietnam
3 billion People worldwide who rely on rice as a staple food
40% Rise in rice price in Thailand this year
19.2% Rise in consumer prices in Vietnam last month, against March 2007
8.4% Rise in food prices in the Philippines last month, compared with March 2007
854 million Number of people worldwide who are “food insecure”
1 billion People globally who survive on less than $1 a day, defined as “absolute poverty”
Rice shortages heighten political crisis in the Philippines
By Oscar Grenfell
8 April 2008
Use this version to print | Send this link by email | Email the author
Rice prices have soared to a 34-year high in the Philippines, exacerbating social and political tensions, and creating more problems for the crisis-ridden regime of President Gloria Macapagal Arroyo amid claims that her government had known of the shortages for more than a month.
Globally, stocks of rice and other foods have plummeted, resulting in a steep rise in prices. Rice has been one of the worst hit with prices jumping 50 percent in the two months to the end of March and at least doubling since 2004. An Associated Press article late last month pointed to concerns that “prices could rise a further 40 percent in coming months”.
An unprecedented cold snap as well as pests and diseases affecting crops in China and South East Asia have had an immediate impact on rice availability, as has recent flooding in the Philippines and Vietnam. Increasing urbanisation, changing land use and shifting patterns of agriculture, including the growing of crops for bio-fuels, are among the underlying reasons for shortages of staples such as rice. Rising prices also have their own dynamic, leading to speculation and the hoarding of rice supplies in the hope of future windfall profits.
Some of the largest rice exporters have limited sales. Vietnam has recently decided to reduce exports by almost a quarter and Cambodia has announced a two-month ban on rice exports. The world’s leading exporter, Thailand, has also begun to control foreign rice sales. India has raised the minimum export price by more than 50 percent and China has begun to import rice.
As the world’s largest importer of rice, the Philippines has been among the hardest hit. Rising prices for rice, along with other food items and oil, led to a sharp jump in the official inflation rate from 2.6 percent in March 2007 to 6.4 percent in March this year. Radio Australia reported late last month that “rice prices in Manila have soared to as high as $1.15 a kilo from as low as 50 cents a kilo a week ago.”
Accusations of incompetence in dealing with the shortages have compounded the political crisis facing President Arroyo. She is already facing allegations of corruption over a national broadband deal and of betraying national interests by signing a deal with Vietnam and China to conduct a joint survey of the disputed Spratly Islands. Her approval rating has slumped to a record low of 23 percent.
Initially, Arroyo tried to deny there was any rice crisis at all, saying it was “a physical phenomenon where people line up on the streets to buy rice. Do you see lines today?”
The leftist peasant organisation, Kilusang Magbubukid ng Pilipinas (KMP), claimed last month, that two secret internal government memoranda dated February 11 and February 27 demonstrate that the Arroyo administration knew of the impending rice crisis since February.
One of the reports cited in an ABS-CBN article included a request for the National Food Authority (NFA) to import an additional 500,000 tonnes of rice. “The registered growth in palay [paddy rice] production is not enough to meet the combined effect of an increase in demand and the need to maintain the required buffer stock by July 1, the start of the traditional lean supply months of July to September of each year,” it stated.
KMP chairman Rafael Mariano told ABS CBN: “As can be seen from the memos Gloria and her regime know that a rice crisis is imminent but it is still fooling the people because she is afraid of her political future, but by doing so she is toying with the lives of at least 68 million Filipinos who earn less than $2 a day.”
Desperate to minimise the political impact, Arroyo has scrambled to secure supplies and to find scapegoats to deflect attention from her administration. Her officials have immediately blamed rice hoarders and unscrupulous traders who have been repackaging low-quality, government-subsidised rice to sell as high quality commercial rice at inflated prices.
Lower house speaker Prospero Nograles declared on April 4 that “smuggling and hoarding by rice cartels should be curbed effectively” and called for tougher legal penalties for illegal price manipulation under the country’s Price Act. Currently penalties of 5 to 15 years prison and fines of 5,000 to 2 million pesos can be imposed. Raids by the NFA and National Bureau of Investigation have taken place across the country over the past week.
Cebu City councillor Sylvan Jakosalem has warned, however, that such actions may be counterproductive. After meeting with rice traders last Friday, Jakosalem pointed out that wholesalers stock up at this time of the year and usually hold back stock to tide them over the lean months from July to August. Without a distinction between stocking and hoarding, traders are reluctant to buy large stocks for fear of prosecution.
Arroyo has also frantically sought to find sources of rice imports, recently securing an agreement from Vietnam to supply around 1.5 million tonnes. In all, the Philippines plans to import around 2.2 million tonnes including from Thailand and the United States. Most imports are currently handled by the NFA, which then provides subsidised rice for the local market. Arroyo called on the finance ministry to draw up a plan to cut tariffs and has announced a doubling of import quotas to encourage private importers—proposals that has already been criticised by local farmers.
Arroyo has also called for cuts to consumption. Agriculture Secretary Arthur Yap announced a plan late last month to encourage restaurants to serve less rice. “We are inviting them to participate in the rice conservation program,” he said. “I’m asking fast food-restaurants to give their customer an option to order a half cup of rice.”
Opposition senator Aquilino Pimentel bitingly remarked: “It reminds me of Marie Antoinette, who shortly before the French Revolution famously said if people had no bread to eat, they should eat cake.”
Millions of working people face food insecurity and hunger. A World Bank update this month found that the proportion of the population living below the poverty line rose between 2003 and 2006 from 30 percent to 32.9 percent despite higher levels of growth. Falling real incomes, compounded by cutbacks in social spending, were the main factors. Other estimates put the poverty rates as high as 40 percent of the population of more than 90 million people.
Rodolfo de Lima, a parking lot attendant, told the Associated Press that if rice prices continued to rise “my family will go hungry.” He added: “If your family misses a meal you really don’t know what you can do….” Another worker Domingo Casarte said: “When people get trapped, I can’t say what they will do.”
Commenting in the Philippine Daily Inquirer, Senator Loren Legarda warned: “Rice is an extremely sensitive political commodity. There is no question a surge in the staple’s price is bound to spur social unrest and political instability.” Already under siege over other scandals, Arroyo is desperately implementing stopgap measures to try to avert an eruption of popular anger.