When the government leads in rice hoarding

Just this morning, news reports mentioned the decision of some local governments to restrict the outflow of rice from their respective provinces. Obviously, such is a result of fear of a rice shortage due to lack of information. Well, it's either that or they do not believe the reported levels of NFA stocks and the private sector's inventory.

At this point, there is no reason to believe that there is an ongoing rice shortage. Even opposition stalwarts agree that harvests are ongoing (and even better than our production for the same period last year), government imports are on its way, and the NFA is set to procure half a million tons at the world market today plus the same quantity a few weeks from now. I need not mention that smuggled rice, based on the frequency of customs seizures, seem to be at an all time high, thus contributing to more supply.

Local governments' restricting the release of rice is tantamount to large scale hoarding. We need not remind them that hoarding is a serious crime. From an economic point of view, massive hoarding creates artificial shortage, leads to high prices and at the extreme, even chaos. The national government should act swiftly and direct all provincial governments to stop hoarding by both private and the public sector.

Let us learn from the experience of Haiti where food shortage led to panic, widespread rioting and uncontrolled violence. Let us all help in making the supply situation, as normal as possible. As mentioned in a past article, at the earliest, a shortage, will happen towards the end of the year. Definitely, it will not be during this summer.