All about the Rice Shortage


Contrary to what everyone believes, the country's rice shortage actually started way back the year 1870 when the Philippines first imported rice. The practice continued except for 2-3 years under the term of President Marcos, when the Philippine actually exported rice. But other than that, domestic production has always been short of the local demand and the country has always been a net importer.

Despite that, experts declare that the country is not lagging in terms of rice productivity. Philippine farmlands harvest much more rice (per hectare) compared to other countries. The problem is there isn't enough land in the country being planted with rice. At the moment, it only has 4.2 Million hectares of land devoted to rice production and out of that, only 1.4 million hectares are irrigated. All in all, the country produces 11.2 million Metric Tons (MT) per year and there is still a rice shortage of about 2.2 million MT for 2008.

This problem is further compounded by the country's rice consuming population which has grown tremendously over the past years. A UP professor argues that had the country managed its population growth well since the 1970's, it would have had a few million metric tons of excess production by this time. That would have made the Philippines a major rice exporter.

History of Rice Shortage (2008)

Going to the current food crisis, the present rice shortage started when international traders increased their offer prices due to an expected decline in global production (2008). Some of the country's regular suppliers gave notice that they will have to decrease their export allocation for 2008 due to projected low harvest that are being blamed for pestilence and climate change. By February 2008, rice was being traded at $500/MT, a 54% increase from the previous year's price ($325/MT). Such a trend continued and resulted to more problems everywhere. In the rice exporting country of India, local prices also grew by leaps and bounds because traders started exporting to take advantage of rising world prices. This resulted to a shortage within India and rice prices grew despite their own surplus. Come March, some exporting countries like Egypt and India banned rice exports in order to arrest its rising domestic prices and this resulted to more anxiety for importing countries.

When the Philippines, the largest rice importer, went to the market for its regular requirement, offers have grown to more than $1,000/MT. Knowing that a serious shortage can cause food riots and an overthrow of existing governments, like what happened in Haiti, the Philippine government had no choice but to buy at whatever prices were offered and sell it at the old retail prices. This made the government lose heavily because of the subsidies.

At every point in 2008, the country had enough rice supply in its warehouses. Imported rice reached the country and local production actually increased. Despite that, retail prices in the country increased drastically and long lines for government subsidized NFA rice had become a regular occurrence. This can partly be blamed to the unrestrained street parliamentarians and media coverage which sowed fear and anxiety to the mostly poor population.

In the exporting countries, production has turned out to be not as bad as projected and today, Vietnam has agreed to supply the Philippines whenever it needs rice. In addition, Japan is preparing to tap into its gold mountains of rice to be able to supply to the Philippines. Thailand has also joined the bandwagon. Despite that, local prices continue to increase.

Solutions to the Present Rice Shortage

As mentioned in this site, in a number of related articles, the people should realize that they can actually plant their own food, offshore rice production and invest more in infrastructures that will result to higher yield and lower production costs. On the demand side, the rice eating population's growth should be managed well. The people should also learn to shift to more nutritious and cheaper alternatives like Yam (kamote). Because every increase in production efficiency will not be meaningful if the demand will keep on outpacing the supply.


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