As chronicled by John Markoff in one essay in “The Rise and Fall of the French Revolution (Studies in European History from the Journal of Modern History)” (University of Chicago Press Journals) “ the Great Fear was paranoia in the rural areas, as a political crisis engulfed France in 1789. Rumors began to spread that the King, bandits, merchants, what have you, were going to swoop down on farmers to take their grain. The farmers formed militias; urban residents panicked. The government panicked.
We are experiencing our version of the Great Fear. A vicious cycle involving dramatic moves by the government, magnified by a media out of any really big stories (NBN-ZTE, Spratleys, etc. all fizzled out by Holy Week) and the combination of the two brought out panic combined with opportunism on the part of the public. Its early glimmerings were reported by Bong Austero in his March 24 column, Averting the impending rice shortage.
Yesterday, the Inquirer editorial, Hoarding, pointed to the Great Fear among local governments (For background, see: Davao will hoard rice, and Bumper rice harvest expected in Mindanao and Govs of provinces in Panay say rice enough for Visayas and Panay has enough rice to feed entire Visayas and
My Arab News column for the week is Fixing the Rice Problem Leaving Others Unattended. Since the modern presidency began, presidents have obsessed about rice: and cultivating rice, literally, has been an image eagerly cultivated by our presidents. See The Presidency as Image, in the PCIJ.
In my Arab News column, I pointed to inflation as one of the unattended problems, and to get a better view of that problem, and other related ones, see this analysis in Global Property Guide: Gloomy days ahead for Asia’s housing markets. Two charts from that analysis are particularly relevant:
The in-house economist of Global Property Guide, Prince Christian Cruz, was the guest on my show and he had some interesting things to say. The rising price of oil last year already put pressure on income, but was offset by the appreciation of the Peso. However, with the rise in rice prices, Filipino families have been subjected to a double whammy and thus, rising inflation. See also Gov’t to cut growth target for 2008 Rising food prices to curb GDP expansion.
Government data says the top three expenses of Filipinos are food, transport, and rent (more or less in that order, but food always being at the top, and ranging from 40% to more than 50% of income expenses), so a rise in oil and rice prices bloats the three, and from his perspective (focused on the property market) this will mean families have to consider moving to cheaper accommodations or defaulting on their housing loans; and that’s only from the point of view of the domestic economy. Add to this a downturn, economically, overseas, and the problems increase, as Filipinos overseas have to set aside purchasing homes (which fuels the construction industry) as their families at home have to spend more for food, transport, and rent…
The other week, I asked a worker how prices had been affected since Holy Week. A serving of vegetable viand went from Php15 to Php25, for meat dishes, Php30 to Php40, a cup of rice from Php7 to Php14.
People have had to adjust their grocery budgets, which up to now had been fairly stable for a few years. See Opinionated Banana:
If UN has an emergency food summit, well our Household also had our own emergency food summit. My mother, who’s in charge of the hardcore accounting and shopping shared that before a sack of sinandomeng rice would just cost at around 1,400-1500 pesos, but as soon as the crisis hit the fan, she ended up paying for 2,000++ pesos for a sack. With just a couple of male species and one diabetic in our household, we’re really not dependent on rice. But still, it calls for attention. We would experiment now on mixing food viands with mashed or baked potatoes, which I’m looking forward to, or develop our skills with cooking pasta. Yes, we’d still cook rice, but in smaller quantities now. It may result to healthy and positive effects, just as long as rice is still an option and not a form of deprivation. We’re all willing to adjust.
This leaves less money for the various service-oriented businesses that rely on people having disposable income. So the immediate problem, for now, is it’s not that there’s no rice to be had, but that purchasing rice is more expensive and won’t be going down in costs significantly in the long term. And we aren’t creating the kinds of stable jobs we need.
A backgrounder on where we were, prior to the Rice Problem hogging the headlines.
From Cielito Habito, PDI Talk.ppt and Michael Alba, economic briefing.ppt (see also philippine economic growth revised.pdf” I’ve snipped some slides. The white ones are from Alba, the colored ones, from Habito.
In 2006-2007, both were looking at the growth taking place in the country (being proclaimed as a new Golden Age by the administration, if you remember) and pointed to where it was really taking place, and where it wasn’t:
Alba had been pointing out that productive land was being lost to the booming property market, and what was worse was government wasn’t even properly keeping track of the development. Both he and Habito were also pointing to the dangers of lopsided growth, since the sectors growing weren’t labor-intensive (Habito pointed to the collapse in manufacturing-related jobs) and a fall in domestic investments, which would be magnified by a fall in foreign investments.
See also The Grand Deception by Perry Diaz. He calls the Palace to task for trumpeting its economic record, and how it brushed aside questions concerning the statistics and where the growth was taking place. He also zeroes in on smuggling as one issue that has hounded the administration -and which, I think, explains why public skepticism has hounded its every move in attending to the Rice Problem. In Thads Bentulan’s PPT, there’s a footnote (see the notation with the asterisk, below) where he raises the question of smuggling, because there’s a gap in the official statistics:
This actually came up during the Senate hearings before Holy Week, but the vacation prevented people from focusing on it. The discrepancy was between what the Philippines claimed was the value of its trade with China, and the values China itself declared. The Philippines claimed something like 8 billion dollars in trade while China said the value was 30 billion dollars. Immediately, during the hearing, some senators began asking if the discrepancy wasn’t a sign of smuggling. Although one senator later explained the discrepancy could be a case of arguing apples and oranges: the Philippine figure may be trade with the People’s Republic of China only, while the China figure may be “Greater China” including the PRC, Hong Kong, and Taiwan (and even the Binondo traders) but also revelatory of “technical smuggling.”
As it is, the rise in rice prices has led to demands for salaries to be raised, see Hefty wage hikes to spell economic troubles for RP–bank. Even the Inquirer editorial warned of the consequences of government allowing itself to be stampeded into raising wages: see Immediate need.
Which brings us to my column for today, which is Rice per minute. It discusses Thads Bentulan’s provocative An Analysis of Rice Prices in Three Countries: Hong Kong, Singapore, and the Philippines (as of April 20, 2008) . You can also download his Hyperwage Theory book.
People in business immediately dismissed Bentulan’s proposal: if it were adopted, one person texted me, “jobs will simply disappear.”
Bentulan says the minimum wage for a domestic helper in Hong Kong comes out to 18,637 Pesos per month. Ask yourself what work or position would pay a similar salary in the Philippines. Many people I encounter who are business owners complain that there are lots of jobs available -only, there are no Filipinos qualified to fill those jobs- but you have to wonder, the jobs remaining unfilled (mid-level managers, bookkeepers, etc.) are at salaries that makes it a competitive choice for a qualified person to seek employment overseas.
Moving on to the politics of it.
There is a novel by Carmen Guerrero Nakpil, which appeared in 1990 but has a strangely contemporary ring to its title: “The rice conspiracy: A novel”. What is interesting to me is how students from the UP School of Economics on my show last Tuesday asked if we really had a rice crisis or if it was a politically-manufactured scenario. They are not alone in being suspicious, see The Multiplication Table of The Jester-in-Exile from April 10:
My suspicion is this: the “rice crisis” is a fabrication, a scare tactic to draw attention away from the assaults on the squatter in Malacanang. With the public focused on this apparent rice crisis, the media will spend very little airtime on the motion for reconsideration that the Senate has filed with regard to Neri vs. Senate, on Jun Lozada and his plummetting visibility, on Atty. Harry Roque and the Quedancor issue, and the Magdalo officers’ conviction for coup d’etat, among other things.
Heck, I’m fairly certain that this rice crisis issue will be milked for what it’s worth, and then the public gets blindsided by yet another impeachment complaint decide to shield GMA.
This was tackled by Mon Casiple in Rice politics and governance:
Of course, it has been a policy of the government for sometime to import rice directly as the sole importer. In theory, it is supposed to sell the imported rice to small retailers directly. In practice, it is the cartels — with connivance from corrupt government officials — who divert these into their own control. A variation on this tactic is to substitute imported high-quality rice with local inferior rice.
The connivance — if not the direct hand — of government officials in rice smuggling from NFA warehouses is underscored by the dearth of direct rice smuggling from abroad. Somebody or somebody’s group is making a killing on the supposed “rice crisis” and the expected panic which drives prices still higher.
In the medium- and long-term, there really will be a rice crisis, as well as a general food crisis globally. At the same time, global rice prices will continue to rise as rice-producing countries increasingly curtail and secure the need of their own population. A lot of factors also contribute to this, such as high population growth, slow scientific breakthroughs, climate change, and higher per capita consumption.
However, in the Philippine case, a major factor is the short-sighted government policy definition of food security as consumer-oriented securing “food on the table. This policy contradicts the common-sense notion of securing your staple food through sustainable production. The illogical policy of tolerating population growth when it outstrips resources complements this disastrous rice trader-friendly policy. Failure to complete the land reform program and prevent land conversion schemes of prime agricultural lands also contributed their share to the government’s failure in achieving real food security.
P43 billion is a drop in the bucket and a palliative when seen against the backdrop of governance failure by successive administrations in the rice and food sector. The GMA administration shares some eight years of it.
Rice, rice everywhere — but not enough to eat, says a news article. Ricky Carandang, in Why Rice is So Expensive, says an overlooked factor is manipulation of the Futures Market in foodstuffs:
As all this hot money goes out of the US, fund managers are looking for other places to put their money. And they’re going into commodities. They’ve seen how oil and precious metals have gone up and continue to go up. But with oil and gold hitting record highs, there’s a sense that the upside may be limited so they’ve focused on commodities that they believe could have a greater short term upside. And that means corn, wheat, soy, and rice.
Yes, there are real supply and demand factors driving up rice prices, but one must concede that a big chunk of the increases in the prices of oil, gold, and rice, are due to speculation on the international commodities markets.
As it is, in Cebu, at least, Rice prices start dropping. The decrease in prices being due to decisions by the traders, it seems, and not because of government’s intervention!
Frisco Malabanan, director of the Ginintuang Masaganang Ani (Golden Bountiful Harvest) Rice program, said that as of Tuesday, farm gate prices of wet palay in Nueva Ecija have been monitored at around P14 to P14.50 a kilo.
He said that commercially, this farmgate price should translate o about P30 a kilo of milled rice, lower than the current prices, which have been hovering around P32 to P34 a kilo.
Malabanan attributed the low farmgate prices of palay to the decision of traders to stop buying in the meantime.
“This may be a strategy for them to bring down prices of palay,” he said.
Some things on the chart above taken from The Rice Problem site: the wide disparity between the farmers’ price (light green) and what the wholesalers’ sell it for (orange); and the relatively small margins of the retailers (light blue).
The wholesalers, though, also need that wide margin because it represents the inefficient costs of distribution in our infrastructure-challenged country. But it also shows the opportunities for maximizing profits, for example, when NFA Rice is then mixed with commercial rice or repackaged entirely by wholesalers and retailers.
Back in April 9, Philippines Without Borders warned that since government, by its nature, is slow to act, by the time its policies actually start having an effect, it could screw up what should at least be a bonanza for our farmers:
Now, based on Business Mirror reports, its seems Malacanang is simply telling the private sector to import what is allowed under the minimum access volume (MAV)…. Crazy!
The fact is that the MAVs have been there all along and no one dared importing much lately simply because tariff is high (50%). Who would be encouraged to import rice that are already expensive in the world market and pay 50% on top of it, thus making the landed ones so expensive? If I’m the importer, I’ll wait for local prices to really move up the heavens before I even thought about availing of the MAVs. That’s what is happening now.
So the supposed policy pronouncement about “allowing the private sector to import rice” was a bogus one – a deception. Or probably it was real, only that government, as usual, simply backtracked, nay backslided. My goodness! Now, the private sector is saying they will only import rice at zero tariff, and given the government’s very slow decision making process, we might end up having those imported rice landing our shores when the farmers are already harvesting their palay. Some of them has actually started harvesting now. That will be tragedy.
Another matter.
We shouldn’t discount, too, as the effects of people being able to game the system, as smoke points out in Malthus got this one right:
You see, some well-off families have been gaming the system. When you reach a certain income bracket, people eat more often at restaurants than at home. For these people, the rice they buy is mostly for the house-help and the pets. Ironically, in the circles I know, these are also the largest purchasers of cheap rice. With most of these upper-income families employing at least two – up to six – house-help, they are able to buy more at those street side selling points.
First thing they do is they go quite a distance from where they actually live. When they find a selling point, the helpers line up with everyone else, only they are spaced about two-three people apart. Most of the time, they’re not noticed as strangers. But when they are, they just say they’re from so-and-so depressed community and that that place ran out of rice. They then give the sob story about having had to walk or travel far just to find rice. It’s clever, really. This story reinforces the notion that there is a shortage, and sets people a-twitter. In short order, they forget that their are strangers among them.
Once they get their quota of cheap rice, these helpers walk walk walk. Eventually, they all meet up, get in the re-conditioned van they use for going to the market and drive on home.
People would go to localities where NFA rice was being sold, even if they’re not from the area and not necessarily the target market of rice relief -the idea being a habit as old as the Japanese Occupation, which is to hoard when things are cheap and simply pull one over the authorities.
Roving rice-buyers aren’t just agents of the well-off. This is where having many family members -and idle ones- comes in handy: you can line up, anywhere, even far from home; and when supplies are limited per person, multiply the number of persons and you multiply the family’s total share. And the strategy is validated by events: even mentioning that the NFA may be forced to raise prices increases the determination of people to hoard now.
Politically, whether manufactured or not, the Rice Problem affords as many opportunities as it presents risks. See Manila’s Arroyo treads risky path with rice campaign. Amando Doronila takes a dim view, saying that Low credibility bodes ill for Arroyo riding out crisis. I’m not convinced the public mood will sour the way he thinks it will, or could. Definitely, as Mon Casiple says, in Malacañang 2010 hopes, the Palace will be sniffing around for opportunities -or trying to create them, as RG Cruz amplifies in an entry. Or, simply try to move fast to take advantage of any that may arise; more so, if it can claim credit for heading of an emergency. House to call Yap on P250-B plan setting the stage?
The Warrior Lawyer has a trilogy of entries, starting with The Politics of Rice then Rice Crisis Relegates the ZTE Broadband Scandal to the Background and On Corporate Rice Farming and Other Notes on the Rice Crisis . Which brings us to issues raised and some readings.
I. Government agricultural policy
Rice: a policy blind spot says Randy David. On the National Food Authority, see Soaring World Food Prices Exacerbate Challenges Across Asia… Especially in the Philippines in the Asia Foundation blog. See also The Bottom Seed: Notes on the Philippine Rice Crisis by Martin Perez.
See Bohol rice farmers ‘forced to eat camote’:
Catarata said that in planting rice, farmers need to spend for one hectare at least P18,745: P900 for the rice seeds, P6,000 for 14-14-14 fertilizer, P4,900 for urea, P30 for the transport of fertilizer and P500 for chemicals against pests, and P6,415 for labor.
Catarata said that if the P1,080 for thresher and blower and P1,800 for irrigation fee is added, the total rice production cost of P21,625 will be shouldered by the farmer, who is able to harvest only 60 sacks of palay worth P28,800.
Because the farmer has to share one-fourth of his harvest, equivalent to P7,200, to the landlord, he stands to get only P21,600 as gross income. After deducting the production cost, she said, farmers end up with a loss of P25.
But this situation can only be compounded by what Ellen Tordesillas says is a Looming fertilizer shortage.
See also P5M full subsidy for rice farmers and Herrera proposes full subsidy of rice seeds.
II. The World food situation
Earlier, Food crisis grows by Paul Krugman and then from Time.com: No Grain, Big Pain. From the Asia Sentinel, recently, Will Rice Depart from Asia’s Tables? The region’s most important food staple may be going into permanent decline.
See RP may not be able to secure more rice from East Asia.
See Wal-Mart’s Sam’s Club limits rice purchases.
III. Biofuels
See Let Them Eat Bio-fuels by Tony Abaya, and Biofuel not to blame for loss of rice lands — senator. He’s right, I think -but there’s the question of corn (and inefficiencies: it’s cheaper for hog raisers in Luzon to import corn from Thailand than to ship it in from Mindanao), which is being allocated for biofuel production.
The Arab News editorial, International Problem, says European farm subsidies have been very successful and advocates some sort of international body to manage subsidies for agriculture on a global scale:
Biofuels are not the root cause of the price hikes; they and the high price of oil are simply the straw that broke the camel’s back. The real villain is the phasing out of subsidies in so many parts of the world at the behest of the IMF and the World Bank. More land has been taken out of food production as a result than any shift to biofuels. It has hit poorer countries particularly hard because they are the ones that have most needed IMF and World Bank support. Without subsidies, farmers in countries such as Ghana or Gabon – West Africa has been particularly affected – could not compete against cheap imports from the big producers, and gave up. But no one realized a crisis was brewing because cheap food imports continued to arrive. It is only now, with prices rocketing, that poorer countries find they do not have enough local producers to fall back on.
Then again, we can focus on growing meat without having to grow animals -see Tastes Like Chicken in Slate.
IV. Population
See Juan Mercado’s look at population from a regional perspective in 2010 dividend. And Manuel Buencamino’s Earth Day blues. Blogger smoke is also in Malthusian mode in C-rice-is.
And finally, a brief survey of the blogosphere:
April 9: see: The Left Click, Arbet Loggins @ Multiply, Life As I Know It and The Unlawyer. A particularly interesting look back at previous rice problems in A Simple Life:
In the slums of Iloilo City, circa middle of 1970s, back when the NFA (National Food Authority) was still known as the NGA (National Grains Authority), “NGA” was synonymous to an inferior variety of rice — dark-grained, 50% broken, and had a chemical-like smell.
Therefore, I am surprised that unscrupulous traders nowadays can repack NFA rice, which retails at P18.25 per kilo, and pass it off as commercial rice, now selling at up to P34 per kilo as of posting time.
As a child, I remember Nanay occasionally taking home with her a brown paper bag containing a ganta (about two and a half kilos) of NGA rice. Those were hard times. Those were the times when Ferdinand Marcos rationed rice to just a few kilos per family.
A few months into the oil-rice crisis of the 1970s, the NGA resorted to rationing rice mixed with corn grits. Although the yellow corn grits-white rice grain mixture looked good, either cooked or uncooked, swallowing it is another matter. The discriminating Ilonggo palate just does not have the tolerance for corn as the staple. We may eat corn during snacks — on the cob, steamed or broiled, or as popcorn, but not when cooked as rice.
I did not remember exactly how long the corn-rice blend lasted in Iloilo, but I can still recall that the Ilonggos did not enthusiastically receive it. We survived and outlasted the rice crisis by subsisting on “binlod” (Tagalog: binlid) — 90 to 100% broken rice grains. Normally, binlod should be chicken feed, but undoubtedly, it fells better on the palate than corn-rice. Binlod is best eaten as “lugaw” or porridge. Sometimes, Nanay would be lucky to obtain some “laon”, which was only slightly better than NGA rice, and we would feel blessed.
Yes, we survived the rice crisis then and we can survive it now.
April 10: see Every man is guilty of the good he did not do…Voltaire, Poolah, Daily Musings, mackybaka! , www.CCLozano.com and Prospect Avenue:
My mom’s having a hard time ordering rice right now. She said the price of rice has risen twice over the week. She’s called all her friends and our relatives. One is selling a sack for 1,500 pesos, our aunt (who owns a stall in a public market) is selling hers for 1,800 pesos. Rumor says that a sack would cost 3,000 pesos in a few week’s time.
I don’t think there is a rice shortage at the moment. People are just getting greedy and hoarding the sacks out of greed and paranoia. It’s mass psychology at work. The rice crisis is a self-fulfilling prophecy that is slowly coming true.
Mom’s thinking of sending our workers out to buy NFA rice. It’s cheaper (18 pesos per kilo versus 35 pesos selling in the market). But you have to line up pretty early in the morning (around 5am) to buy the rice (shop closes at 10am). Each buyer can only buy up to two kilos of rice. There are cops (or soldiers) standing guard, making sure that everyone gets a fair share of the NFA rice.
April 11: see Splice and Dice:
That is the part where a morally bankrupt regime purports to be the moral buttress of the nation. That is the part where a Garcified leadership pretends to wrestle with the liars, cheaters and thieves in this nation when that leadership has nobody else to wrestle other than themselves. That, too, is the part where a gloriafied regime sees everything else as investments, owing largely for its economic eye, while failing to understand the basic difference between what is legal and what is just.
I’ve always believed that what is legal does not necessarily equate with what is just. While we may have laws, and we do have laws, there remains the sweeping thought and feeling that we lack justice. Invoking an executive privilege may be legal, but does it bequeath us any justice? Well beyond all that there is to be truly disappointed about, sanctifying that executive privilege, one which has truly become a privilege in the strictest sense of the word, by the prostitutes of the law corrodes the fists of justice. It’s a case where a distorted defense of a privilege which the constitution does not even explicitly provide tramples upon the written forces of truth and transparency, the gravity of which pins us back to a crisis worse than one plaguing our rice supplies.
The rice crisis is more imagined than real and that observation will be valid for a few more months. But with the international commodity speculators getting into the game, the price of rice is now being sold in excess of $1,000/MT. With tariff, VAT, freight and other expenses, the landed price should go beyond P68/kilo. If the NFA will still sell it for P18/kg, that means that it will be subsidizing the people at P50/kg. Importing 1 million tons will mean a loss of P5 B in losses for a few months this year alone.
If we will need to import more by next year, the prices can be expected to increase further and that may be when the trouble will start for us. We need to be able to resolve this problem by doubling our harvests starting this year.
Why men like George Soros, Jim Rogers, Marc Rich and Joey Salceda (local ecology only) play an important part in the global economic ecology. Just like in nature these men spend their lives looking for edges or advantages in the equity, fixed income, currency and commodity markets on the planet. These predators are a necessary part of the ecology. They are responsible for culling of the weak economies. Everyone thought that by stocking up of currency reserves you would avoid foreign exchange blowouts. But when the major reserve curency devalues you try to recoup by diversifying into other markets that will hold its value.
Soros ever the joker once suggested that it would be better for the GCC countries to make their long term contracts with the international integrated oil economies and soverign states public to aid in pricing information.
What most everyone forgot was that fact that currencies are simply derivatives of value or claims of value. Dollars today are priced in oil. Pesos are also priced in oil and rice. These commodites have strategic value in ones purchasing power.
Price equilibrium scientists construct their simulations (mathematical models) on perfect conditions with a few stress points of variables thrown in. It would be impossible for them to monitor every butterfly flapping their wings.
In reality it would be impossible for my favorite magician in the BSP to monitor India’s, Thailand’s and Vietnam’s economic fundamentals or the GCC economies from whom we get our oil. More so the humoungous U.S. economy that sets up the short term cost of money for all countries that use the dollar as a reserve currency in their domestic markets. Some countries practice a national policy.
Guess which ones do. The countries I mentioned above are the very countries from whom we import out strategic needs for rice and oil.
The main reason for the BSP existence is price stability. Since 1994 we have been importing the basic staple.
For a country that has been a net importer of capital and since WTO a net importer of food and oil that is a major failure of surveilance.
What would happen if a major oil terminal in Saudi Arabia was hit by Usama and took just 5M barrels of oil out of the supply equation? That on top of the problem that all their imports from Europe is costing them almost twice what it used to cost. From $.80 to Euro 1 to almost $1.60 to Euro 1.
Demand requires 80 + million Present capacities are about 2M barrels above that demand. Then you have the added equation of qualties of crude and refinery capacity.
Salceda even has an inside track on the financial markets in the Philippines.
Prior to joing the government, Hank Paulson was required to divest his holdings and place the proceeds in a blind trust. He got an exemption in the capital gains tax which is heavy in the U.S. as part of his signing on to his public service position.
That would be a little complicated for guys in the Philippines to grasp.
From the view of the fiancial markets the world is divided into frontier markets, emerging markets and mature markets. Frontier markets are those wherein an exchange economy is still in its embryo stage and headed into an emerging market. Very raw, primitive and simple division of labor.
Equilibrium scientists do not look at markets in this manner. They have a simple one size fits all perspective.
The Phils. is between a frontier market and an emerging one. Go dwon to parts of the ARRM to see what a frontier market is like. Or some of the urban poor areas in the country.
This is what the rep of a global bank told me over breakfast yesterday:
“Let me brief you on the situation in your country,” he said.
“Your president created the crisis for political reasons She caused the global price of rice to go up when she telegraphed how much rice she was going to buy.. Now with high oil prices driving up the price of everything she will have the problem of controlling inflation. Add to that the fact that the importation will drain your reserves and investors are leaving your financial markets, my bank thinks the peso will go down to 43 or 44 by the third quarter. However, we still believe that the peso will settle at 39.50 or so by the end of the year.”
I just nodded my head, just like I do when I’m with my tarot card reader. Sometimes they’re right. Besides the breakfast he bought me was delicious.
It’s good that more and more people are becoming aware of the overstatement of GDP. Whether it’s in communist USSR or capitalist USA (in the case of Enron for example), window dressing is a perilous exercise. Smoke and mirrors has a limited shelf life.
HEhehe, our recently bought sack of rice is labeled from South Korea!!!! The previous one was from Vietnam. Some people are really laughing their way to the bank.
P.S. Joey Salceda is damn fugly. He’s got so much dinero he could at least run to Vicky Belo. And his teeth! Por dios. However did this guy become a Merril Lynch honcho or was it UBS Warburg?
George Soros is an asshole. Go Mahathir.
BTW, regarding ‘hyperwage theory’, raising everyone’s salaries by ten times is equivalent to adding another zero to our currency with the same effect. I prefer the previous suggestion of drawing horns on the 200 peso bill.
RP equation:
democratic political system + market economy + sociocultural flaws + catholic church + geophysical bad luck = “sick man of asia”
hvrds,
you know, you’re overflowing. Build yourself a blog, will you, so we can pursue you there without encumbering somebody else’s thread.
Well, just in case you don’t know how, type “how to start a blog” on search box, the rest is easy.
Cheers.
Just to do a follow up on ricelander’s comment, one great blogging service is i.ph. It’s free and the features are great. It is very easy to use. I am not an avid blogger so I am not too familiar with the how tos. But the site is easy to use 🙂
Sam’s Club rationing rice
Many stores in the U.S. are limiting bulk sales of some kinds of the grain as supply fears leap
Apr 24, 2008 04:30 AM Dana Flavelle
business reporter
The headline here shows a lone Filipino Soldier guarding a mountain pile of NFA rice:
http://www.thestar.com/Business/article/417731
It was said again recently of the American blacks (with the Obama pastor “God damn Amerikkkka!!! The US government witholds the cure for Aids”, and it is true everywhere. Peoples who do not trust their own government see conspiracies everywhere.
I suppose this “it is simple, really” speaks of a benign0 who trusted the government he has left and the government he is now in.
———–
That flunkie that manuelB talked to was probably just there for the breakfast too, what with him/her saying in the sama paragraph “… inflation, rising oil prices… moneys leaving the country” and peso at 39.50 at end of year.
…in the meantime, Intel is allegedly pulling out of the country…lured by Vietnam and China…
(Vietnam is doing something right….first, more than enough rice for them plus extra to sell to us…and now investment incentives….and they even speak not much english ha…so there goes GMA’s so called we is speaking english advantage….)
that’s another potential 3000 people without jobs who will be queueing for subsidised rice…
Bentulan’s hocus-pocus is : if all Filipina maids in Alabang are paid like a Filipina maid in Singapore, then the NCR-area economy will be like Singapore.
jakcast :
RP equation:
democratic political system + market economy + sociocultural flaws + catholic church + geophysical bad luck = “sick man of asiaâ€Â
————-
So is your solution:
Dictatorial system + command economy + whatever your solution to “sociocultural flaws” (whatever that is) + getting out into the water and pushing the Philippines nearer China or Vietnam, or the oil and gas deposits of Indo and Malaysia?
I hazard to guess (without a shred of evidence) that if you take a thousand Filipino Buddhists and if you take a thousand Filipino Christians, that the Buddhists will be better-off in at least 5 metrics (e.g. education attained, family income, mental- and physical health, close-knit families, optimism about future).
——–
How is that, DuckV, for a solution to “sociocultural flaws”?
By the way, two to four dams will go a long way in solving the “geophysical bad luck”, and if these dams also produce electricity, even better. Damn, I’ll be happy if they name the first one the “Poor Man of Lubao” Dam.
And think the employment as a dam gets built, the facilitators happy as contracts get awarded; land-prices going up, a few hundred kilometer roads getting built… many winners (but a number of families losing as they get “bought out” of their home lands).
@ DuckVader
Not my solution. Just tried to summarize some of the points being discussed in this blog.
For mental exercise, maybe we could put some weighting.
The geographic and physical bad luck will include RP being in the typhoon catch basin, earthquake belt, ring of fire, or whatever you call them, etc.
The country is very much exposed to natural disasters. No 1 in danger I think. Didn’t you notice, as soon as one region/area recovers, some calamity hits another area? These events affects our national planning and budget allocation.
I know we cannot change the country’s geographic and physical attributes. Or maybe, we can?
jakcast, in your equation, you overlooked Inequality.
cvj, shouldn’t socio-cultural flaws take care of that?
Notwithstanding the issue of Pinas-should-be-self-sufficienct in rice, the overwhelming issue (in my mind) is employment. GDP is less important than percent-gainful-employment. Even GINI is less important than percent-gainful-employment. If an extra hundred thousand Pinoys are gainfully-employed NOW, and another extra hundred-thou Pinoys gainfully employed by end-2008, life becomes more blissful in Pinas.
GMA has the lead because infrastructure is needed to support factories/employment, e.g. electricity/power, oil/fuel for transportation, water (potable for all; irrigation for farms), education. GMA has the lead because corruption-in-government is extra-ordinary high friction to overcome. “Patong” as well as “kotong” — stealing from each and every single household in Pinas. The “patongs”, I am sure after somebody gets a master’s degree for the research and a thesis, can be directly translated into jobs lost.
Having said that, businesses also have the lead in jobs-creation. Jobs-for-jobs’ sake is the government job (a patronage-job is a job). The drive for productivity is best met when the business grows (not when the employee-headcount gets reduced).
As for the unemployed, the underemployed, the high-school and college-youth, the soon-to-graduate, the employed who wish they are earning more — no one has reprieve from self-reliance and personal accountability.
to the guy in the rectal video surgery: file your case and publicize the names of the perpetrators as much as you can. send letters to all medical agencies abroad. let’s see who among those involved will be hired overseas (because you know each of them has plans of going abroad)
i’ve been inside an OR (operating room) a few times, and that kind of behavior seen on that youtube video is normal, especially in public hospitals. you would not believe the violations being committed by OR staff when the patient is under sedation.
i imagine rich people would soon demand that their operations be monitored by a relative so they can be assured that no staff is taking pictures of their naked bodies and posting it for all the world to see.
legislation should be passed that all operations be videotaped for records purposes. anyone wants to file a case for malpractice, just subpoena the tapes. problem solved. let’s see medical staff misbehaved when they know they are being taped.
i’m sick with this event really. i say hang everyone involved in that operation. ostracized them to death.
Had a few chats with people around me and I would wonder if the rice crisis is really out of paranoia or the truth. I’m even wondering if this was really a ploy by the government to drown ZTE and Lozada out of the Media.
Honestly, I’m still confounded by all of this, since we are very much capable of NOT needing to import rice and instead producing our own, not to mention, the surplus. Perhaps the most important thing we can do is actually start using the soil for planting potatoes or something. I don’t think there is a world wide panic for potatoes (correct me if I’m wrong)
Curiosity aside, I have something to add to the solutions on the micro-economic scale.
(Based on the entry under the population [NGA]) We really have to be creative now. I mean, we at least survived the food shortages of WWII and 1970 due to the use of creativity. Why can’t we do it now, instead of just importing rice. I don’t think owing 50 Billion is going to help in the long run, if we don’t focus on our food first rather than the economy.
@UPn
The Dams idea isn’t very effective. [Its a blank promise if it really provides power, unlike the 3 Gorges Dam in China.] Most of the Dams here (if not all), fall short of the promised or targeted power produced. Might as well stuff those funds in food production and job creation, instead of letting it get pocketed by DPWH (But that’s being ideal, honestly).
and my aunt who’s a farmer says: what rice crisis? they keep scaring people, there really will be a shortage in no time.
this accelerates my prediction exponentially.
i’ll believe in a rice crisis when commercial rice starts disappearing. but until then, tokyo-tokyo still has unlimited rice, so again, what rice crisis?
@philwospeditor
“Perhaps the most important thing we can do is actually start using the soil for planting potatoes or something.”
Potatoes need sub 20C temperatures for the tubers to grow. This is why they are only grown at altitude in a tropical country such as ours….lowland potatoes are available and maybe in the future, the yields of these lowland potatoes will be worth the effort of planting them..
@ nash
Could potatoes grow in those un-irrigated lands meant for jethropa (biofuels)? At least people could consume patatas, just in case they run out of rice.
jakcast, as far as the prevalence of the elitist mindset, yes that can fall under ‘socio-cultural’. however, inequality is also an objective economic and political condition.
Our Leaders have no idea what business are we in. They are just going with economic flow instead of preparing ahead, ready for any economic flow.
our land can offer our own people and to the world:
Ex: Rice, Coconuts, Tropical Fruits, marble , tourism and so on…. which department is responsible?
Our Over population can offer:
1. Outsource jobs: why is apple only in China… why is microsoft always go for China… can we compete with labor force? What is the difference between Filipino and Chinese in terms of labor. None.. both countries remains cheap in terms of labor and Filipinos can speak better English. Whic department in charge of marketing our peopleto global corporation who needs jobs to be outsourced?
2. Overseas employment will provide overseas remittances
Production of Basic Commodities can provide revenue from profits and revenue from taxation. High Employment can provide revenue from individual taxation and overseas remittances…
Why is our current leaders and ministers in charge of all of these affairs cannot focus on their areas of employment. Why keep the job if the job cannot be done but then paid salaries out of people’s money?
Rice problem is our basic daily needs in terms of food therefore it only requires basic management from the Department of Agriculture… No alibi’s are acceptable especially when people are obviously getting hungry.
Easy said than done but our leaders are paid to get the job done therefore we expect them to know what they are doing…
Everyone,
There is a rice shortage. if you look at the graph, the price of rice has been gradually going up for the past few years but what’s really curious is that since 2007, there is no let up in the increase. The problem, as anyone of you would realize quickly, is not the immediate future but the long term f the trend continues and no solution has been found for the shortage.
It’s not as if there were recent major crop failures and droughts. If the problem truly stems from overpopulation, then we are fucked.
The solution to the rice crisis or shortage if there is really one, DON’T EAT RICE.
@supremo
“The solution to the rice crisis or shortage if there is really one, DON’T EAT RICE.”
It’s like saying don’t eat pasta to an italian guy… Filipinos are used to rice, period. No use trying to substitute it with something else, because we can be quite stubborn at times.
@nash
“Potatoes need sub 20C temperatures for the tubers to grow. This is why they are only grown at altitude in a tropical country such as ours….lowland potatoes are available and maybe in the future, the yields of these lowland potatoes will be worth the effort of planting them..”
Well… Either potatoes or sweet potato. Maybe it will be worth it. If we can get them to go cheaper, it can alleviate the need for rice as a staple food. [Rice is almost irreplaceable to a Filipino Taste.] (Ideals at the very peak of it.)
PhilwoSpEditor,
‘It’s like saying don’t eat pasta to an italian guy… Filipinos are used to rice, period. No use trying to substitute it with something else, because we can be quite stubborn at times.’
There are 7 million Filipinos scattered outside of the Philippines. Do you think most of them still eat rice most of the time?
Asian rice sold in the US comes in 25 lb. bags. That’s 10 kilos of rice against the normal 50 kilo bag in the Philippines. Most of the Filipinos who come to my store only buys 2 bags at a time. It will be several weeks before you see them again. Those Filipinos must be substituting rice with something else. Most likely cake.
incredible story… totoo ba eto o kuwentong barbero?
did your banker friend say who’s the president at the end of the year when the peso settles at 39.50 after going down to 43-44 by third quarter (when our reserves are drained and investors are gone)?
if it’s still gloria, then she’ll be taking all the credits again. that would be brilliant after causing the global price of rice to go up.
grd,
Investors will leave the Philippine financial markets when the US economy recovers. That will mostly likely happen next year.
the price of rice in the u.s. has gone up by 70%. a 25 lbs. bag of good quality rice now costs over $20, or roughly 84 pesos per kilo in philippine setting. filipinos in pinas don’t know how better off they are, what with nfa rice that cost 18 pesos per kilo.
the problem is global, and blaming the gma government for the perceived “crisis” is like blaming it for the world price of oil. one factor considered here for the ballooning price of grain is the increased use of such agricultural products for production of non-fossil fuel, e.g. ethanol. we are now burning our food to drive our cars. oh well, if only we can ‘abolish’ the law of supply and demand (lol)
of course, overpopulation doesn’t help the situation.
personally, i think from our perspective here in america, this global economy is more of a curse than a blessing. we exported our jobs, technology, natural resources, expertise and knowhow, and all we got are cheap goods, inferior products, and third-world attitudes. we tried to spread our bounty and wealth by allowing even our consumer goods for domestic consumption to be produced abroad. now it’s hard to find anything in the market that is labeled “made in america”. on top of it, we are now a debtor country of china. we are now the ‘marketee’ instead of the marketer/producer. i miss the ‘old’ world order.
supremo,
you must be in the US. you have to really apply RICE in Philippines not outside of Philippines. Yes, Rice remains the very basic food for the majority. The issue is Rice Inflation in the Philippines.It is a crisis. Rice Inflation in the US is not going to be a real big issue because per capita income remains superior compared to the rest of the world and secondly, US population eat grits, corn, wheat and others…
Yes I can eat with no rice for 6 months but I am concerned about my country. Are you?
In essence, there is no rice shortage but available rice at retailers are expensive. The same is true in India where they have the stockpile of rice for export. Most traders in India refused to sell locally with depressed local pricing when international market price is high.
Philippines has enough supply of rice. NFA who has the country’s monopoly on internationational rice trading knew how much supply it has. In the provinces, the farmers have their stockpile of rice to last another harvest, with excess quantity sold to local traders at a price which is ridiculously low when compared with retailers selling price which is more than double the farmers price. The wholesaler pocketed the windfall income in the guise of procurement and distribution cost.
That means the Filipinos living in the urban areas who buy their rice are paying more. The cops who are guarding the NFA supply were there to ensure that buyers will not have more than usual quantity which will create artificial shortage instead.
The impending rice crisis generates more controversy than it actual supply because as Filipinos we cannot eat without it and the threat has directly affected our pocket. However, it is far from reality to think that people will rise against the government when the provinces and the farmers have their farm supplies.
@supremo
true. i think it’s best if people eat what is locally produced. the lesser the air miles the better. i barely eat oriental rice mainly because it’s expensive. (the cost of bringing all that stuff abroad…only italy produces rice at large quantities in these parts but mainly for risotto).
you should adapt to your environment. an italian insisting on pasta in thailand is an idiot.
sometimes, I wonder why all these de lata (corn beef, sardinas etc…) have to be flown all the way to the UK for example. why do i want to pay £0.80 for Purefoods that is full of crap meat and preservatives when i can get cheaper and fresher options??…hay, the price of homesickness nga naman…. the philippines should be exporting better products like tuyo/bangus in oil, smoked talangka…etc…nakatulong pa sa ekonomiya…
Bencard on, “filipinos in pinas don’t know how better off they are, what with nfa rice that cost 18 pesos per kilo.”
NFA rice from the US is a blend of broken rice which is good for “linugaw” and usually shipped by US for African nations to fight poverty . That is not the same quality of rice that is commercially sold. Besides Filipinos in America have no problem with price regardless if expensive.
why it’s always been at the expense of the people? why are we tolerating majority of our leaders? where, when, and how do we start?
Let’s focus on Corruption. Corruption involves money. Money must be accounted for. How are we going to implement such change if we are only the people. The people is the government therefore it’s the Constitution. The Constitution summarizes the policy and procedure. Who is hiding that book? We should all study that book and find the missing link.
Oh yes bencard. I was watching last week the Charlie Rose Talk Show in PBS and there was this Columbia University professor who was saying the same about the ethanol and teh food crisis. And he was saying that there one african nation who was able to deal with the crisis very well. Sorry there are so many thing in my head that I can remember the names.
Anyway what caught my attention was the action that wre doen by the president of that country. He simply used whatever money his government to issue something like a bond that can be used by the farmers to buy fertilizer
Dodong, may problema pa rin ako sa rice dito. Yung dati naming binili sa Cosco na Jasmine rice ay hindi na available. Bibinili namain ano yung nasa shelf, kay alang ibang iba talaga ang lasa.
“Inflation is always and everywhere a monetary phenomenon.”
â€â€Milton Friedman, A Monetary History of the United States 1867-1960 (1963)
Information at the speed of light and knowledge at the speed of thought. Understanding comes a little later and the speed of awakening is relative to subjective historical forces.
Vladimir Ilich Ulyanov (Lenin) once declared that food is the currency of all currencies.
Paul Volker the dogamtic hard currency advocate and a true believer in controlling money supply to fight or prevent inflation is coming back in vogue.
It is trully amazing to see the frenzy in the rise of inflationary expectations.
All traceable to one root cause. The tremendous increase in the supply of money worldwide and the hunt for higher yields.
http://www.project-syndicate.org/commentary/rogoff39
http://www.project-syndicate.org/commentary/rogoff40
http://www.project-syndicate.org/commentary/rogoff41
Food budgets ratios as related to income levels in the U.S. range from 4% to 15%.
In the Philippines it is not the same. Point of fact the representative basket used by the government lists food as almost 50% of food budgets. It is only an imaginary basket based on an imaginary income level as incomes in the country have a broad spread.
So for many food costs eats up a lot if not most of incomes.
This is where the distorted population demographic plays an important role.
Government stats on the total labor force available is over 45+ million. (Elderly and those below 15 years of age are not included in the labor force.) Of that only 30+ million are the participating labor force. Half of that figure do not earn a wage or salary. And only half of that figure again have full time employment between the government and the private sector. Formal private sector employment is shrinking.
Government employment is one of the major safety nests employed by the state. (Nest not net)
So we have approximately 15M people employed full time, part time and seasonally between the government and the private sector. The other half are self employed and non-paid family workers. (Also mostly part time and seasonal)
The rest of the labor force for the most part do not contribute to the economy.
So large part of the participating labor force are not part of an exchange system based on monetary systems. They are also obviously affected by that part of the economy that is already monetary based and the problems of monetary systems will migrate to the informal economy.
How does this inflationary surge in basic food staples and energy products affect the income levels of the vast majority? The effects could be deadly…..Social instability will come from the informal sector. The unseen and the unheard from.
Clearing upland forests and turning trees into charcoal is a growth industry while the Philippines could become the organ transplant capital of the world after taking the title as the worlds biggest importer of rice grains.
The increasing slumification and choking air of urban areas continues with the rush to expand urban areas to build enclaves of residential communities to escape the slumification of the previous urban areas.
The subjective impartiality of many clearly traceable to agnosticism.
Too much mystical and superstition based religion and very little scientific thought defining the culture.
Anf for those that believe that science should become our master, remember the words of the Gita, ‘Now I am become Death, the destroyer of worlds.
The scientific and industrial applications of warfare in the hands of eschatological idiots or followers of the end of days (Neo-Malthusians)is the greatest threat the planet faces.
Bound by the doctrine of price equilibrium (quantitative analysis)based on supply and demand as the one and only true religion.
helow sir! pls add me na to your link list.. huhuhu
pls sir.. tagal na po site mo sa blog ko.. tnx so much sir
Yes, everyone has a theory on high food prices: Market Manipulation, Overpopulation, Bad Agricultural Policies and even blaming Biofuels.
The fact of the matter is that high energy and commodity prices play a central role in the high cost of food.
1. Fertilizers and chemicals have rocketed to all-time highs, and these are essential inputs to agricultural production. Oil prices have driven nitrogen fertilizer prices to stratospheric levels, while the commodities boom has made phosphatic fertilizers extremely expensive. Organic may be the way to go, but that’s a pipe-dream right now. All farmers know that, without fertilizers and chemicals, you won’t get a crop that’s worth shit. Besides, there aren’t that many people who’ll pay premium for organic food.
2. With the high cost of inputs, farmers are hard-pressed to finance their next crop. It isn’t easy for farmers to borrow money to buy inputs. And the bigger the amount spent for inputs, the bigger the risk in case of a bad crop. At this rate, only rich guys can farm.
3. High fuel prices make cultivation expensive, since farm machineries are fuel-driven. Carabaos may not run on oil, but they aren’t used that much anymore. Besides, how many carabaos have gone the way of the slaughterhouse?
4. High cost of energy makes post-harvest much more expensive. Drying and transporting crops to the market have become terribly expensive.
There are solutions, to be sure. And government has known these solutions for a long, long time. But government never acts until there’s a crisis. And we can be sure that government will only contrive stopgap solutions until, hopefully, the crisis goes away.
“helow sir! pls add me na to your link list.. huhuhu
pls sir.. tagal na po site mo sa blog ko.. tnx so much sir”
Hi, Did You Know! Ano ba meron sa blog mo, bigay ka ng sample dito, baka mabili namin. Pag nabili namin, baka maawa sa’yo si sir.
The Phils. will never attain self-sufficiency in rice. Period. Too much mouths to feed, not enough land. IRRI says that our rice yields are already double that of Thailand so the proposal to increase spending on agriculture does not convince me.
And yes Virginia, the rice shortage is not imagined. The era of cheap food is over. Call it “rice shortage” or whatnot, bottom line is that prices of food, not only rice, are and will continue to increase. And not it’s not the hoarders that’s causing the problem. The problem was there before they took advantage of the situation.
Side-topic to bring costs side by side with benefits (and jobs wait for those who know how to work with maple trees and poplars):
on Earth Day (last year 2007) Mayor Michael Bloomberg promised New Yorkers a million trees in 10 years. The cost of planting a single street tree in Manhattan? About $1,000.Estimated cost of the urban reforestation project is $600 million, annual maintenance not included. An early hurdle faced by New York? The city can’t hire trained arborists fast enough.