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Recent years have seen wild swings in the supply and prices of food. For a while, onion prices jumped seven-fold. At another time, farmers were forced to dump their tomato harvests due to the lack of buyers.
Food prices have been blamed for the spike in inflation rates, with the government often caught flat-footed and left to react to crises instead of anticipating and preventing them. In many instances, this can be traced to the lack of accurate and timely data, which has led to poor program design, faulty planning, and delayed decision-making.
Our recurrent problems with rice supply and prices are a case in point.
In 2021, PSA placed the beginning (January 1) rice inventory at 2.332 million tons. If we add the domestic output of a little over 13 million tons in rice equivalent and imports of almost 3 million tons, total available supply during the year reached some 18.4 million tons.
PSA then reported that, by December 31, the country had only 1.86 million tons of rice left, which means we had used up around 16.5 million tons. After deducting the quantity utilized for seeds, animal feeds, industrial purposes, and allowance for wastage, we can conclude that around 14.9 million tons were consumed as food.
This outcome should have immediately raised eyebrows. The derived food usage of 14.9 million tons meant that each Filipino ate an average of 135 kilos of rice in 2021, significantly more than the per capita consumption figure used by the Department of Agriculture (DA) of 119 kilos.
This apparent discrepancy was never explained; nor was the PSA’s ending inventory figure for 2021 adjusted. It thus became the official beginning inventory for 2022, which resulted in an even more perplexing statistical anomaly during the year.
Compared to 2021, total available supply was higher in 2022 despite a slight dip in production, mainly because imports ballooned to 3.8 million tons. Yet, PSA placed the 2022 ending inventory at only 1.85 million tons, or practically the same as at the end of 2021. Where did all the excess supply go?
When asked to clarify its figures, PSA insisted that its inventory estimate was correct, give or take a small margin for errors. It added that its figures assumed that each Filipino consumed about 110 kilos of rice during the year.
If we take this as a given, then either consumption increased or production went down.
It is highly unlikely that per capita consumption increased in 2022, given the relatively high rice prices during the year. At most, total consumption would have grown by only about 1.5%, equal to the population growth rate, or by around 200,000 tons.
The only possible explanation therefore lies in the production estimates. Our computations show that the only way we could have ended 2022 with 1.85 million tons is if production in rice equivalent was only 9.7 million tons, and not 12.9 million tons as reported by PSA. This implies that palay production actually dropped by a whopping 5 million tons, or by 25%, in 2022. Even if we use the DA’s higher per capita consumption figure of 119 kilos, palay production would still end up lower than the PSA estimate by 3.2 million tons.
Some industry players are not discounting this possibility. They note that imports of major fertilizer grades declined by around 30% during the year, as prices more than doubled. Farmers would presumably have drastically reduced fertilizer usage. But PSA reported a mere 1% drop in production and yield during the year.
If production actually fell in 2022, then we – and the government – have been working with the wrong figures all along. And it is possible that the rice crisis we experienced in August and September this year arose from this overestimation of local production – which led to a distorted picture of actual rice supply in the market.
More disturbingly, it implies that the billions we have poured into the rice industry these past few years have not significantly increased farmers’ productivity and competitiveness. As a result, we have become more dependent on imports for our basic staple, and more vulnerable to disturbances in international markets over which we have little control.
The data discrepancies will continue to haunt us until we firm up our figures and improve our data collection system. Only recently, the DA claimed that we will end 2023 with a stock level good for 90 days, or about 3.3 million tons. This is 78% higher than the ending inventory in 2022. How could we end up with more rice at the end of 2023 when production is estimated to be only slightly higher while imports declined significantly due to high international prices?
Information is indispensable for proper analysis, planning, and decision making. We cannot properly address our recurrent food shortages and problems, if we continue to have a shortage in timely, correct and meaningful data.
Given its wide mandate, the PSA probably needs additional manpower and technical expertise to implement a dedicated agricultural data collection system. Within the DA, a system must be set up to gather and link data from different agencies and programs and to process these into meaningful and timely information for program implementors and policymakers. The private sector can contribute to this effort by providing regular feedback to check the accuracy of the data generated by the system. – Rappler.com
Raul Montemayor is the national manager of the Federation of Free Farmers.