A STAPLE PROBLEM?
A HISTORY OF RICE CRISIS
IN THE PHILIPPINES
While the Philippines is known for its agricultural lands,
the country continues to face recurring rice crises over the years
By Alex Evangelista
December 19, 2018
A Staple Problem? History of rice crisis in the Philippines
MANILA, Philippines – President Rodrigo Duterte's administration was mired in rice problems during his second year in office, pulling it away from his target of 100% rice self-sufficiency by the end of the year. While cause for deep concern, these issues are not entirely new to Filipinos.
Soaring prices, weevil infestations, and the depletion of reserves in several areas worried Filipinos in 2018, causing an uproar and even raising questions on the leadership of National Food Authority (NFA) Administrator Jason Aquino.
The situation hit a low point in April when Aquino revealed that the agency had only less than two days' worth of buffer stock. The NFA is required to maintain a 15-day stock at any given time, and a 30-day stock from July to September to prepare for calamities.
Filipinos continued to feel the brunt of the impending crisis, as prices in September reached up to P46 for well-milled rice, and P43 for regular milled rice.
It was only in October that the rice situation seemed to have eased, when Duterte finally lifted restrictions on rice imports to reduce inflation. In the previous year, he discouraged rice importation in order to protect local rice farmers. (READ: [OPINION] Solving our 'unli' rice crisis)
The Department of Agriculture also set suggested retail prices for rice to combat inflation. Rice prices have gone down week-per-week from October, and have eased to 8.1% during the first week of December.
For a country teeming with agricultural land, the Philippines continues to suffer from rice crises every few years. Here’s a look at the rice woes that previous administrations had to deal with in the past.
Marcos administration: 1965-1986
President Ferdinand Marcos opened his term with the Green Revolution which pioneered scientific research into high-yielding varieties of rice in the country.
However, things took a turn when Martial Law was declared and as millions of Filipinos faced a dwindling rice supply due to various political and environmental factors.
In the 1970s, the country was visited by strong storms that caused tremendous damage to the agriculture sector. Things worsened in 1972 when Typhoons Edeng and Gloring ravaged Luzon, causing great floods especially in the central plains. The country also suffered from a major drought the months after.
Aside from these, political tensions in Mindanao and a growing incidence of tungro, a rice-infecting pest, contributed to low rice supplies.
Local rice production also dropped to a low 17%. To address this, the government relied on heavy imports with 455,000 tons in 1972 from just 10 tons in 1968. This, however, failed to address the problem.
Rice stocks were almost gone in 1973 that they had to mix in corn grits to continue supply. A New York Times report said that white rice disappeared from the markets and “block-long double lines” of people waiting for rice rations swamped Manila and other provinces.
It took 6 years before the rice supply finally stabilized.
Corazon Aquino administration: 1986-1992
Still recovering from the rice crisis in the 70s and Martial Law, former president Corazon Aquino’s government was not safe from impending rice issues.
Increases in rice prices were also felt during this time, brought about by the looming Asian financial crisis and El Niño. (READ: FAST FACTS: Rice prices in the Philippines)
A sudden spike in rice imports was seen from 1988 to 1990, around the same time El Niño affected agricultural regions such as Cagayan Valley and Southern Mindanao. According to a PAGASA study, the affected rice and corn area from the 1989-1990 drought totaled 283,562 hectares.
While Aquino failed to dismantle the NFA’s monopoly on the international trade of rice, she launched the Grains Sector Development Program (GDSP) in 1990 which sought to finance agricultural programs and overcome institutional and investment constraints that can hinder food security.
However, agreements with financial companies on the GDSP were only finalized in 2000.
Ramos administration: 1992-1998
Filipinos suffered the brunt of the 1995 rice crisis in the country which stemmed from poor government planning. Rice demand increased by 5.7% in that year, but local output was stagnant due to droughts the year before.
Despite this, Ramos took the advice of then agriculture secretary Roberto Sebastian to import only about 300,000 metric tons (MT) of rice, as compared to the 700,000 MT suggested by the NFA.
Price ceilings imposed by the National Price Coordinating Council, along with panic-buying from consumers, aggravated the shortage problem. Like Marcos, the Ramos administration resorted to heavy rice imports, which reached as much as 722,000 MT in 1997, and 2.17 million MT in 1998.
Millions of Filipinos queued for hours at NFA’s Bigasang Bayan outlets to buy cheaper rice at P10.25 per kilo, as commercial rice prices soared from P21 to P28 per kilo.
Estrada administration: 1998-2001
While there were no huge rice problems during former president Joseph Estrada’s term, his administration was the second largest importer since the Marcos era.
Under Estrada, yearly average rice importation was at 1.02 million MT – nearly double that of the yearly average importation of 520,562 MT during Ramos’ time.
In 1998 alone, rice imports reached 2.2 million MT from 722,756.50 MT in the previous year. The huge increase in imports was influenced by the effects of El Niño on palay production, which prompted the government to seek ways to stabilize rice prices.
Estrada, however, managed to increase average rice production growth to 12.47% and imports returned to lower levels in the next two years at about 800,000 MT.
Arroyo administration: 2001-2010
The Arroyo administration had to face the 2008 global rice supply crisis that drove international rice rates upwards.
According to the World Rice Statistics and Food and Agriculture Organization, the Philippines, despite being the 8th largest rice producer in 2008 (at 16.8 million MT), was also the world’s top rice importer (1.8 million tons) which could mean that the country was directly affected by the crisis.
By March, NFA reserves were down to up to two weeks' worth of supply, and average price for regular milled rice had gone up to about P43 per kilo by June – almost a 50% increase from the usual P25 to P30 per kilo.
The Kilusang Magbubukid ng Pilipinas (KMP) claimed that Arroyo had known about the impending rice crisis as early as February that year. It is also important to note that Arroyo, together with the NFA, signed contracts with other countries like Vietnam in 2007 to import 2.2 million MT – the highest in a decade.
The government, however, was quick to deny the existence of a rice crisis, insisting only on a “price crisis.”
These events fueled panic among Filipinos, who began stockpiling rice in homes and lined up for government-subsidized NFA rice for cheap prices at P18.25. Due to the huge number of people lining up, however, NFA had to decrease the limit of rations from 3 kilos per family to just one.
Arroyo ordered a crackdown on hoarders and rice smugglers – who allegedly bought subsidized rice and sold them at higher prices – to “ensure that cheap government rice ends up on the tables of the intended consumers – the country's poor.”
The rice crisis drove millions of Filipinos to poverty and hunger. In a study by the Asian Development Bank, the number of self-rated poor Filipinos peaked at 59% in the second quarter of 2008.
While prices stabilized a year after, heavy imports continued until the end of Arroyo’s tenure in 2010.
Benigno Aquino III administration: 2010-2016
One of former president Benigno Aquino III’s promises when he started out was to achieve 100% rice self-sufficiency in the country by 2013. However, he failed to fulfill this promise.
As early as April 2011, just a year into Aquino’s term, a confidential report by the National Intelligence Coordinating Agency (Nica) that was leaked to the media warned the former president of a looming rice shortage brought by changes in the international food market and weather systems.
Quelling fears, the government managed to increase rice production in the same year and slashed rice imports from 1.3 million MT to 660,000 MT. The United Nations Food and Agriculture Organization also saw stable production for the next two years.
It was in 2014 when rice prices began to rise, with average retail prices going beyond P40 per kilo, reminiscent of the 2008 rice crisis. Because of this, the government had to resort to more imports, adding 500,000 MT for immediate importation to the original set imports of 800,000 MT for the year. (READ: Rice self-sufficiency: A question of geography?)
Aquino also urged a crackdown against hoarders who allegedly stockpiled NFA rice for selling at higher prices. Rice smugglers were also targeted. According to the United States Department of Agriculture, rice smuggling was more prominent during Aquino’s time at 2.3 million tons from 2011-2014, as compared to 500,000 tons smuggled in 2005 to 2009 under Arroyo.
According to the Trade Union Congress of the Philippines, however, price spikes must not be blamed on smugglers, but on reduced imports in 2013 in line with the rice self-sufficiency program.
In 2015, the Philippines was hit by El Niño which drove prices higher again due to low production.
Rice self-sufficiency fell to 88.93% from 96% in 2013, as imports continued to boom. Aquino managed to boost this number to 95% by the end of his term in 2016. – Rappler.com