Food crisis, inflation due to lack of gov't direction – groups

MANILA, Philippines – Several interest groups and experts slammed the government's supposed lack of a coordinated plan to ensure the country's food and nutrition security, which then led to various issues including inflation.

"Wala talagang malinaw na plano. Lahat ng solusyon ay reactive lang (There is no clear plan. All solutions are reactive)," said UP School of Economics professor Toby Melissa Monsod in a roundtable discussion on food inflation held on Thursday, September 13.

Monsod, in particular, questioned the government's murky priorities. (READ: Gov't 'did little or nothing' to stop 6.4% August inflation)

"The long-term challenge is this: What is the issue? Is it rice? Is it food? Is it farmer income? These are 3 different things, and the government needs to understand that there is a trade-off," she said.

Monsod also slammed the National Food Authority (NFA) for being unable to bring down rice prices. (IN CHARTS: This is how bad August 2018 inflation is in regions)

"If you import a small amount, it won't do anything to impact the market. It has to be decisive," she added.

Monsod also warned that relying on rice importation means that the government would be at the mercy of global prices.

"Clearly, the demand is going to cost money. People in the world know we're desperate for rice and it's a seller's market. They will bring up prices," she said.

Global forces 

Hazel Tanchuling of Rice Watch and Action Network said the Philippines should brace for more rice problems, especially if the government would depend on rice imports. (READ: Rice prices jump to new highs in 4th week of August)

She said there would be thinner supplies in 2019 and the Philippines would compete with other countries like China for rice.

"Rice importation and trade liberalization will not address this self-inflicted crisis. This government must recognize that there is a food crisis largely because of the lack of leadership in food, agriculture, and fisheries governance," she added.

Tanchuling also opposed the proposed rice tariffication bill, as local farmers cannot compete with the cost of other countries.

Senate agriculture committee chairperson Cynthia Villar, who is for the measure, previously admitted that countries like Vietnam can produce rice at just P8 per kilo, while Filipino farmers need P12.

Villar proposed giving farmers P10 billion in subsidies to go with rice tariffication. The funds would be used to improve farmers' skills and their production methods, which would lower production costs.

On the other hand, Monsod said the government should recognize that rice production is not really the country's "comparative advantage," or the ability to carry out a particular economic activity more efficiently than others.

Rice prices comprise a huge chunk in computing for inflation.

Inflation hit another 9-year high in August at 6.4%, but economic managers said the figures are still manageable.

While business groups agree inflation can still be managed, they warned that the government should take action immediately.

President Rodrigo Duterte already agreed to issue an executive order intended to address the price issues. –

Ralf Rivas

A sociologist by heart, a journalist by profession. Ralf is Rappler's business reporter, covering macroeconomy, government finance, companies, and agriculture.