Rice Shortage: Real or Imagined?

Recently, President Gloria Macapagal Arroyo said that there is no rice shortage; however, she said, the people will just have to pay more. She claimed that all this talk of "rice shortage" is imaginary. Well, last year the government imported 1.4 million metric tons of rice from Vietnam to fill a 10% shortage in domestic rice production.

This year, in an unprecedented call to the Vietnamese president, Arroyo asked for a guarantee of 1.5 million metric tons of rice. With a rapidly diminishing domestic production, the government has to import 20 percent -- about 2.5 million metric tons -- to avert a rice crisis this year.

It is interesting to note that the world price of rice in 2003 was only $200 per metric ton. Last year it was around $300. Currently at $700 per metric ton, the market price is anticipated to soar to as much as $1,000 per metric ton. That would peg the price of commercial rice in the Philippines at P40 per kilo. Currently, the price of domestic rice supplied by the government-owned National Food Administration (NFA) is P18.00 per kilo and commercial rice is P31.00 per kilo.

The question is: Once the supply of domestic rice is depleted, could the people -- particularly the poor -- afford to buy commercial rice at exorbitant prices?

A few days ago, Vietnam lowered its rice export quota this year from 4.5 million metric tons to 4.4 million metric tons in order to increase its own rice reserves. To date, almost 4 million metric tons have already been exported leaving only half a million metric tons to be sold through December of this year. Obviously, Vietnam would not be able to supply enough rice to the Philippines this year. Where would Arroyo get the rice she needed to prevent a rice crisis?

The rice crisis in the Philippines was bound to happen because of the failed economic policies of President Arroyo. Once a rice-exporting country, the Philippines today is the world's top importer of rice.