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Thursday, May 1, 2008

Scrounging Amidst Plenty

Chairman's Corner
Angelito M . Sarmiento
MARID Agribusiness Digest
Vol. 19, No. 1, May 2008

In the news lately is the long queue of people buying NFA rice -- taking more than an hour of waiting for a buyer to buy three kilos of low-priced rice. The long lines are reminiscent of years of the past, when a similar situation came to force.The increase of price of rice (and other food commodities) in the world market -- over 100% over three years -- is a nightmare for rice importing countries like us and Indonesia and Bangladesh where the food cost is about 80% of income earned by their poorest constituents.

And despite the continuing assurances of government that there is no rice shortage, people are reacting more to a shortage scenario, coupled with pronouncement from military and police authorities of raiding rice warehouses, looking for hoarded rice.

Over the years, we have always looked at nearby rice-producing countries to supply the domestic gap between what we produce and the demand of households, and that it was profitable for NFA to import rice and sell at the domestic market. There was a margin or profit to be made whenever rice is imported and sold in the domestic market.

And that import volumes that were 600,000 metric tons before soared to more than a million and we were importing 1,500,000 tons by 2003. This continued to increase, and for 2008, we are looking at going beyond 2,000,000 tons, a record of sort.

This contiunuing importation is a puzzle to many as we claim to be an agricultural country, having a topnotch school, and home of the International Rice Research Institute (IRRI), which is focused on increasing rice supply. This is aside from the fact that we were never in short supply of agri-technocrats.

The importation and perceived rice shortage is a recurring bad dream that refuses to go away, that haunts the bureaucracy, and puts uncertainty over a period of time.

Many reasons have been brought forward why we continue to import rice, each pundit putting his ten-cents worth of analysis, and yet failing to see the whole scenario as a problem of political will. This is not the first time we have this problem.

The problem seems to be of national magnitude, but solutions can be found by breaking down the problem into manageable parts.

While an environment of cheap fuel cost is gone, and fertilizer price has gone out of the window, there are still options to negate the spiral-up effects of these inputs. All is not lost simply because we are in a regime of rising cost of production.

As I have always espoused, there are pockets of production areas that can still be brought into higher productive levels by working on the existing system. Identification of rice deficit areas and finding out why so can bring in solutions based on what exists at ground level.

A basic computation of rice produced in an area divided by its hectarage can bring out under-productive areas. Further study of why such a situation exists can bring reasons that are manageable even at the lower level of the bureaucracy.

It is in this scenario that DA should look at LGUs as an effective partner in working out solutions to this seemingly never ending food production short fall in the countryside.

There are about 78 provincial governors, more than 90 city mayors and about 1,600 municipal mayors, and each would definitely like to establish production benchmarks that can provide food security for their constituents (who will cast their votes come election time).

Critical in this working hand-in-hand with local executives is a common understanding and agreement on expectations and this can be done through continuing dialogue as each individual area would require a tailor-fit arrangement, a far cry from the usual national approach of one program-fits-all.

The role and participation of local executives are imperative to any food production program coming from the national agency as agri-production takes in gestation or growing time. Agri-projects cannot be left alone unlike construction of infrastructures. Any neglect along the way comes out in the computation of productivity levels, and as such, participation (or monitoring) at grass root level is a must.

Local government units are able to tap resources which are at arm's length from them. Each would have the needed manpower to work on identified projects, and that they have their own funding sources, no matter how meager these are (brought about by the devolution). DA can tap on the strength of local units to further its objective of setting up production areas nearest the market, if not consumed within.

The regime of low fuel cost to transport agri-products to far-away consumption areas is gone. And if we continue to work on this model, transport cost incremental is added on to the price, making it unaffordable to consumers. This is one of the reasons why the price of Thailand and Vietnam rice had increased more than 100% over a period of less than a year.

Let us work on local areas of productivity to make food affordable, and we no longer need to scrounge for food amidst plenty.

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