The Philippines is a TRADITIONAL IMPORTER of cereal (rice, corn, wheat) so this rice shortage is nothing new and abnormal. For and against, the hypes in Media made it easy for what Traders want…jack up prices of agricultural commodities, riding the global trend even before its actual effect has reached this shore. With the mind of consumers already preconditioned, price increase, not only of rice, has never been this accepted by the public without much uproar. Squeeze the masses right on, they’ll always somehow find something to buy food!
Food price increase has already been happening in countries with biofuels industries in place but it should be noted that in the Philippines the program is barely in the drawing board to possibly actually affect everything at present.
Bandila (ABS-CBN) reported last night that it is now farmers that dictate price to traders. Like it is now happening all-over our countrysides. This is ridiculous distortion, a myth being hyped. Maybe media should always add “allegedly”, “reportedly” or the likes and effects in their report instead of being unwittingly (?) becoming party to disinformation and/or distortion.
People were not born yesterday. Rice trading in this country is an established system and order. When a poor farmer brings one or two cavans of Palay to the market, whether he likes the price or not, he must sell. He cannot afford to bring the Palay back to the farm, or go home without salt, vetsin, dried fish, kerosene, matches, tobacco, and other basics that you can imagine poor family needs. It’s all traders’ (sometimes series of middlemen) game from there and NOT farmers. Most Filipino farmers no longer own their produce, partial or total, long before harvest due to non-government, traditional lending system. This is the general situation of Filipino farmers. NFA support palay price for farmers is mostly availed by traders presenting as farmers. Sure, many of them have rights to call themselves farmers, too. From farmers go to traders and from there Palay goes either to the private sector or to the NFA. From the NFA, milled palay or rice goes back to traders who passed them as NFA rice, and yes, illegally passed them on as commercial rice at whooping profit! Check that out and learn why.
The observations by no less VP Noli de Castro and Agriculture secretary Arthur Yap that there is no rice shortage, in fact, is never been wrong. People can see it everywhere; there is plenty of rice stock in market places. Why people line retail outlets, it is because of CHEAPER NFA rice and not because of no more rice. NFA rice sells around P18.00/kg and commercial rice range from P35-40.00/kg. U.S. rice imported by NFA are estimated at P25.00/kg. Right now we have a situation short of an Ultra Stampede for NFA rice out there. Because sale is limited, one can see wife, the husband, their children in queues.
The crack down by government of traders in the wholesale-retail of NFA rice recently, is nothing new. National Foods Authority (NFA) rice being passed as commercial rice is something perennial. Collusion of Traders and NFA authorities is as old as the National Grains Authority (NGA). And we see no end to that. The Philippines is known as the most corrupt country in the world today that has not sent, figuratively, a crook to jail. The corrupt cannot be jailed because of corruption! No wonder we don’t have national discipline. [I had been in U.S. territory where I had observed people living on food stamps. In there food stamps are food stamps. Here, dole-out fertilizer can become liquor, cigarettes, anything.]
Hype or no hype I think we had these price increases coming sooner or later. We are a free economy and there is nothing legal to brake traders except NATURAL LAW of SUPPLY AND DEMAND, which is effective only in situations where there is free, wide and true competition. This economic policy, as people see now, is inutile where there exist private monopolies and cartels. In that case it is manipulation and whim, and not supply and demand that is at play – artificial shortage of supply and, as we see, near stampede by consumers.
In a free economy, hypes are in fact flimsy excuses that traders or anybody can do without. Everyone is free, take or leave. Incidentally we are dealing here with foods that people cannot do without. People have no choice but to take, unlike cars and jewelries that they can do without or leave.
The government is never wrong about activating the NFA more, in the retail of rice. It has somehow helped stabilize the price of rice. This has somehow provided competition in the business. Question is how long government can sustain the operation that maybe should be pushed further to be felt by the market. NFA is the only thing that stands between the already miserable Filipino masses and the Pinoy trade ‘Mafia’ today.
There has been an idea floated that NFA should adjust its prices a little bit up. To strengthen and to sustain operation, and to be fair competition with the private sector, I think, yes. Normally many businesses out there actually, operate around 30-35% Gross Profit (GP). Maybe NFA should evolve near that figure whatever would be the final outcome of the prices of its rice. If masses can not afford the prices I’m sure there must be trouble somewhere else.
Some inter-actions made elsewhere that I think are related to the problem here:
rltjs Says: February 27, 2008 at 5:28 pm Modified
I am in the third world and my impression is that much of the Earth’s agricultural resource -land, is underdeveloped. Hunger in my part of the world is not caused by shrinking land but rather by: lack of industries and jobs, almost slave wages, and estimated 75% of our agri-potential has yet to be developed. Farmers are ill motivated by poor prices. Practically, we don’t have things like subsidies for farmers.
Unlike the advanced countries, improved prices of agricultural produce expected by bio-fuels craze here hopefully will change the situation for us.
Jeremy Says: February 27, 2008 at 5:33 pm
Interesting point – the switch to biofuels may put an end to the huge US surpluses that swamp the markets with cheap grain in some poorer parts of the world. That would be a good thing ultimately, but it may mean several years of shortages until that 75% starts producing enough to make up the shortfall.
Some people do stand to gain from high food prices. The people who’ll benefit the most will be poorer countries with a food surplus, who will suddenly see their exports worth more.
RLTJ Says: February 28, 2008 at 3:50 pm
I am not really sure about poor countries having food surplus. I only know we have plenty of idle lands. The Philippines IS a traditional cereal IMPORTER. We are traditional rice, corn and wheat importer. We import corn from U.S.A. We do import rice from other Asian countries so I guess they have surplus on that.
RLTJ Says: March 16, 2008 at 3:10 am Modified
The world is dependent on fuel and energy and dictated by forces that control them. Fuels have gone unusually high in relation to everything else. The introduction of bio-fuels uncovers the fact that agricultural products when or if converted to fuels will pay more.
In a free economy, nobody can tell farmers if or when they convert their corn, for example, to energy instead of feeding them to livestock. Solution to the problem apparently is, either Free States subsidize or increase subsidy to farmers, or otherwise it is time that States should initiate socialized trading in selective agriculture and/or in energy to affect possible better price to (producers) farmers and bring possible lower price to consumers. Trading: American, Russian, Red Chinese, they speak only one universal language – Capitalist system – Buy low Sell high and man in the street cannot do anything about it.
NFA to save the day, Ningas Cogon or for real?