Gov’t to put more rice on plates of poor

NOT FOR BIRDS ONLY

MANILA, Philippines—After 36 years working as a warehouseman, Billy Vallejera believes sparrows are the most serious threat to the country’s rice granaries, their sharp, sack-ripping beaks more than the equal of tiny rice weevils.

“Mice are also a problem, but based on my long experience the birds are more destructive,” Vallejera said, detailing the many failed efforts he has made to deter the flying bandits.

But two years after a food crisis that forced the rationing of the staple cereal in Metro Manila’s slum neighborhoods, the government says its own policies rather than pesky birds are to blame for waste and mismanagement.

Roughly a third of the country’s 94 million people live on one US dollar a day, and food expenses account for more than half of their budgets, according to government data.

Biggest rice importer

For the rest of the world, Philippine rice policies are closely watched as the country is the world’s biggest importer of the grain.

President Benigno Aquino III wants to stop state-subsidized cheap grains from being put directly on the market, arguing the current policy allows the rich to buy artificially cheap rice at government’s expense.

He instead wants to use the money that would have been spent on rice subsidies to distribute the grain directly to the poorest people in the country.

Local grains trading and imports are dominated by state-run National Food Authority (NFA), which operates large warehouses such as the 7,500-ton capacity silo managed by Vallejera, which sits beside a Manila slum.

The government agency performs a multitude of roles, including keeping a buffer stock of grains, supporting rice farmers by setting a buying price for their produce, and keeping rice affordable to the poor.

The NFA said it imported 2.4 million tons of rice last year, partly as a reaction to the global food crisis in 2008.

NFA spokesperson Rex Estoperez said the Philippines expected imports this year to reach 1.8 million tons, about the same as in 2008.

Halving NFA budget

Aquino, who took office on June 30, has asked Congress to halve the NFA budget next year, taking away funds used to subsidize rice prices.

“The ‘buy high, store long, sell low’ policy of the NFA for local and imported rice has resulted in huge financial losses for the state,” Mr. Aquino said in a letter to Congress, which called for amending the NFA charter.

Free lunch for rich

A total of P4.2 billion ($96 million) in rice price-support funds would be transferred to the Department of Social Welfare and Development, Aquino said, where cheap rice would be offered only to the country’s poorest 4.6 million families.

Budget Secretary Florencio Abad said keeping the price of rice low under the current policies amounted to a free lunch for the rich because only a small portion went to the poor.

“Only 16 percent of the poor are able to buy NFA rice. The 84 percent do not need the government’s support,” Abad added.

The World Bank endorses the change, which would allow for a more pinpoint aid targeting the poor, said Eric Le Borgne, senior economist for the Manila office of the World Bank.

“It costs up to P8.6 for the national government to send P1 to the poor through the NFA,” Le Borgne said.

NFA Administrator Angelito Banayo, who declined a request from Agence France Presse to be interviewed, has criticized Mr. Aquino’s plan to wind down the NFA rice subsidies.

“I pray that the (social welfare) department knows how to manage rice stocks, let alone determine shortages and shortfalls,” Banayo told GMA television this month.

Eliminating subsidies

The President’s plans are expected to take many months, if not longer, to be implemented as he would have to win congressional approval for eliminating the subsidies.

If introduced, the reform is not expected to greatly impact the international rice market, as the total amount being imported would not change, just its distribution.

The NFA is mandated by law to maintain buffer stocks, typically 30 days’ worth of total Philippine consumption, to ensure food security.
Agence France-Presse