Sunday, October 21, 2007

Hunger Pangs

The poll group Social Weather Stations (SWS) reported that a new national hunger record was set early October 2007, when 21.5 percent of Philippine households had suffered from hunger, without having anything to eat, at least once in the three months previous to the latest SWS survey of Sept. 2-5, 2007. This new percentage consists of 17.4 percent who said they experienced it only once or a few times, termed Moderate Hunger, and 4.1 percent who said they experienced it often or always, termed Severe Hunger. The survey respondent is the household head, acting as spokesperson for the family.
As expected, the government went into denial mode. Yet, Secretary Duque, who supervises the National Nutrition Council and assigned by the President to monitor the hunger situation, was unaware that the Bureau of Agricultural Statistics (BAS) did a survey in mid-2006, and obtained a national hunger rate of 19 percent validating the SWS account of hunger, reported this to the secretary of agriculture January 2007, but never circulated to the Cabinet.
Hunger means lack of adequate nutrition, the foundation of good health and wellbeing. Poverty is the root cause of hunger. How can public policy be reformed to alleviate poverty? An obvious first step is to ensure the availability of cheaper rice, our staple food.
To do this requires a politically painful decision, the abolition of the National Food Authority (NFA) with its monopoly of the on international trade in rice and corn The NFA gets in the way of the free market.
Who are required to secure a license from NFA? All persons that engage in the rice and/or corn business whether commercial or NFA rice/corn.
What activities in the rice/corn industry are required to have a license from NFA? All businessmen engaged in the following activities are required to have a license: retailing, wholesaling, milling, warehousing, corn shelling, processing/manufacturing, threshing, exporting, importing, indenting, packaging, mechanical driving
Former Finance Secretary Cesar V. Purisima had a plan for major restructuring of the NFA to ease the weight of its impact on the government’s consolidated public sector deficit. He said NFA contributed P27 billion to the 2004 consolidated debt and the government loses an average of P2 billion a year in subsidies. Former Budget Secretary Emilia Boncodin, chimed in and said the NFA had long been a concern among budget planners but the executive decision had yet to be made on how to rationalize the functions of the NFA.

NFA primarily operates as a trading company that implements the government’s rice support program by buying palay from the farmgate and selling rice in strategic areas to smoothen the volatility in the prices. "It’s really intended to support the price of palay and rice but we have not been able to afford the amount necessary to actually accomplish this.I personally recognize that some form of subsidy is necessary but it can no longer be the kind of subsidy being implemented now," Boncodin said. "At the very least, the process has to be totally transparent, it can not just go through credit lines the way it is done now." Several legislative measures filed in Congress all designed to ensure that NFA would no longer be a burden on the national budget were not passed.

Earlier, the International Monetary Fund (IMF) said the NFA and other GOCCs should be prevented from shifting the burden of fiscal adjustment to the National Government.
The IMF said the National Government should avoid taking on more fiscal burden from other government corporations.

Abolish the NFA and consumers could benefit from the entry of lower prices of imported rice and corn. Besides, the NFA is a huge financial burden incurring huge losses in the order of P2 billion per year. These funds could be used instead as subsidy for those rice and corn farmers unable to compete with imports.
Lack of resources makes it difficult for the country to achieve its goal of being self-sufficient in rice and do away with costly importations by 2010.
Aside from feeding a population that grows 2.3 percent annually, the bid for rice self-sufficiency is also intended to eliminate expensive rice imports that cost government about P28 billion annually.

Agriculture Secretary Domingo F. Panganiban announced early 2006 that self-sufficiency in rice is achievable by 2009. "There is a clear roadmap on how to boost rice production and even achieve a surplus by 2009 or 2010, but all that is hinged on the injection of all necessary inputs required to make the plan work," said an official of the Ginintuang Masaganang Ani (GMA) rice program.
The ambitious dream hinged on several iffy conditions: if funds were made available to rehabilitate the dysfunctional 50% irrigation facilities and add new systems. The other major obstacle is the plan demands the use of the so-called golden rice hybrid which costs six times the price of inbred seeds A former DA official also pointed out that the "age-old" problem of lack of support infrastructures has yet to be faced squarely by policymakers.
What we don’t know is that talk of food self-sufficiency, mainly rice, is turning into a myth. And it is hurting us.
The Philippines, a net importer of rice for decades (sporadically before that), importing 191,000 MT in 1984. We bought 934,000 MT in 2003 of which 646,000 MT were purchased by the NFA and 229,000 MT purchased by farmers, allowed for the first time under the Farmers As Importers (FAI) program to import rice. The importation of 600,000 MT of rice in 2004 was planned, 984,000 actually imported. In 2005 imports doubled to 1,805,000 MT and in 2006 dropped slightly to 1,622,000 MT. Vietnam was the source of most rice imports starting in Year 2000.
A former Department of Agriculture Secretary announced "the government was considering a ‘free-for-all’ policy on rice importation by allowing the private sector – mainly farmers and traders – to bring in rice in unlimited volumes. The President wants as much as possible to lift the limits imposed on rice imports such as volume restrictions”. But, this could be another bureaucratic ruse that will allow politicians to oblige their favorite patrons who have cartelized the rice trade, depending on the implementing rules. The FAI program raises fears that this will backfire as farmers discover importing is more profitable than farming and convert their CARP-acquired lands to non-farming use.
An economist from the International Rice Research Institute (IRRI) said that maybe self-sufficiency requires more investment than it is worth. "Despite playing a key role in Asia’s Green Revolution," David Dawe said, "the Philippines may never attain rice sufficiency and could be better off importing cereals." He added, “self sufficiency has a cost if you want to do it and that cost is borne by the poor. Dawe said arable land is in short supply in the Philippines where only 30 percent is planted to rice. The soil itself is "more suited to growing coconuts and maize" and lacking the major river systems and rainfall patterns available for the heavily water-dependent crop in such areas as Bangladesh, Thailand and Vietnam. "God made that land for growing rice," Dawe said.

Dr. Rolly Dy of the University of Asia and the Pacific agrees with Mr. David Dawe
Dr. Dy points out that small farmers prefer planting rice no matter how uneconomical. For one, it is not perishable, it can be stored and it can be eaten if unsold. The politics of rice has, Dr. Dy believes, contributed in part to the neglect of other sectors and industries such as corn, coconut, sugarcane, fruit trees, aquaculture, oil palm, etc.

Still, while it is important for us to make sure we always have enough rice to feed our people, it is also equally important to make sure that it is affordable. The high cost of rice is a burden to the budgets of poor families. For those consuming at least one and a half 50-kg bags of rice a month, rice purchases can be as much as a third of take home income. It also has a strategic implication to the economy. "High food prices will drive wage demands. High wages will make labor-intensive industries uncompetitive. As a result, investors prefer to locate in low wage countries, assuming all other factors constant.
According to noted economist Dr. Bruce Tolentino, retail rice price in Vietnam is only half that of Philippine rice because of the higher yield and lower logistics cost. NFA imports of cheap rice are sold to match the higher-priced locally produced rice to prevent killing the local rice industry. For this reason, consumers have paid a higher price double that of neighboring countries for over a decade. In effect, consumers subsidize the high cost of rice. A hidden tax, if you will. Our politicians have never thought of this problem in this light. This is why we always hear platitudes about the need for rice self sufficiency.
In yet another staple, NFA stats show yearly corn imports since 1980, except for 6 years of no importation.
Alleviation in 2008
In October 15, 2007 PGMA bares P10-billion allocation for poverty alleviation in the 2008 budget. Highlighting the close interconnection between poverty and human rights, President Gloria Macapagal-Arroyo said her administration will mobilize P10 billion in the government’s 2008 national budget to eradicate extreme poverty.
The poverty alleviation agenda is presently limited to the school feeding program that provides a kilogram of rice to each school child as an inducement to attend school. An urban poor spokesman wailed that the war on hunger declared by Gloria Macapagal-Arroyo last March allocated one billion pesos spent with no accomplishments to show. Last September, without subjecting the previous allotment to accounting and assessment, there was the announcement that another P3.3 billion will be set aside to fund the "Food for School Program."
Helping improve the needy's nutrition
Lack of fresh fruits and vegetables can cause serious health problems, especially for the poor. We often hear about how lack of access to recommended cancer screening can delay diagnosis and treatment of cancer among the nation’s poor, worsening likely outcomes. However, studies also suggest that the environment in which the poor live may promote lifestyles that increase risk of developing cancer rather than protecting against it.
A diet high in fruits, vegetables and whole grains and low in fatty meats and empty nutrient snacks is a vital step to lower cancer risk. Yet foods most available to those who live in poverty may be just the opposite.

Lack of refrigeration
Low-income residents are also more likely to have no or limited refrigeration and cooking equipment. When access to fresh produce is limited, and facilities for storing and preparing it are also limited, people are more likely to eat high-calorie, low-nutrient snack foods. One study among urban poor concluded that education programs were needed, not so much to kindle desire for healthful foods, but to help people deal with lack of refrigerated storage and cooking equipment.
Families with limited income are also more likely to choose fatty cuts of meat and poultry, which are usually cheaper than leaner cuts, salt-preserved food that risks problems in kidneys, blood and heart, and smaller amounts of fruits and vegetables. Children’s dietary staples are often nonperishables, such as salty snacks, candy and soft drinks. Simply increasing the availability of healthy food may increase its consumption.


Anonymous said...

Refrigerated trailer vans of 10,40 and 45 TEUs could be filled up right in the fields during harvest and once filled to capacity can be tractored to population centers. This is more efficient than using the token military airlift. The NFA should operate a fleet of these vans regularly. All it does is move produce for a minimal cost. Val

orly_habari said...

Politics hobbles the ability of NFA to innovate activities and good ideas such as yours. The nation would greatly benefit if the NFA is abolished to free the rice market
Further to my email on NFA, suggest read Solita at