Why hunger got worse and how to fight it

Published by rudy Date posted on April 13, 2011

LET’S help the Palace with some numbers. Not impeachment votes in the Senate, Mala-cañang’s No. 1 worry, but something that really matters to ordinary Filipinos who are the avowed bosses of President Benigno Aquino 3rd: hunger and poverty figures.

In our data sleuthing we shall see what factors—including, sadly, the government—contributed to the hunger spike, and what the Aquino Administration must do to fill Filipino stomachs.

First, the numbers. PNoy said he could not reconcile government and business reports of more people being hired with the latest Social Weather Stations survey showing higher hunger incidence and self-rated poverty.

The Chief Executive also wondered if the March poll might have missed beneficiaries of the government’s conditional cash transfer program. Begun by the Arroyo Administration in 2008, CCT more than doubled in size this year with P21 billion allocated for monthly stipends to poor households who fulfill conditions like keeping children in school and getting regular medical attention.

Certainly the SWS March data was worrisome. It saw self-rated poverty hit 51 percent of households, the first time it crossed the halfway mark since October 2009.

Hunger incidence was even more alarming, rising for the second survey in a row. It affected 20.5 percent of families, up from 18.1 percent in November and 15.9 percent in September.

The latest ratio exceeds the 1998-2010 average hunger incidence of 13.8 percent by nearly seven points. And this is before any rice crisis, as warned by the National Intelligence Coordinating Agency (NICA) in a February report.

So is there something strange about hunger and self-rated poverty rising despite more people getting jobs and cash assistance? Let’s look at the figures more closely, Mr. President.

Jobless figures are up
Companies and the Department of Labor and Employment have told PNoy that firms are hiring. Maybe so, but could it be that more people are losing work than getting it? That’s exactly it.

In the latest jobless figures, the January 2011 rate was up slightly to 7.4 percent, despite last year’s blistering 7.3-percent GDP expansion. By contrast, a year earlier in January 2010, unemployment fell to 7.3 percent from 7.7 percent even after stagnant 0.9-percent growth in 2009 due to the global recession and the ravages of Typhoons Ondoy and Pepeng.

Plainly, if 2010 growth did not translate into 2011 employment, that won’t help arrest the rise in hunger, which was already on the way up late last year. It rose by 2.2 percentage points between September and November—or about 2 million people. Another 2 million grumbling stomachs were added by March.

What about CCT—was it reflected in the hunger data? Social Welfare Secretary Corazon Juliano-Soliman explained that the bulk of stipends went to the Visayas. Therefore, hunger in that region should drop. Did it?

CCT program worked
Yes, it did. The Visayas hunger rate fell sharply to 14.7 percent from 18.2 percent. So in fact, contrary to PNoy’s remark, SWS seemed to have captured CCT beneficiaries.

OK, so it looks like the President shouldn’t be too impressed with hiring stories, since unemployment actually crept up. And the hunger survey did reflect the expanded stipend program. But since CCT had not targeted Luzon, hunger shot up there. Outside Metro Manila, 25 percent of households—more than 10 million of PNoy’s bosses—missed meals, up from 18.1 percent in November.

What else could be deflating people’s stomachs? In a word, inflation. In this writer’s eight years as Secretary of the Cabinet, the one factor that most frequently explains rising hunger is rising prices.

Inflation deflated stomachs
Quite simply, if people have to spend more on basic necessities, they eat less or not at all. And when rice prices jump, the impact on hunger is most pronounced. Indeed, the ups and downs of the hunger incidence chart follow very closely the gyrations of the rice inflation graph line.

The very poor suffer the most from price hikes. They have already pared their non-food spending to the barest minimum, so any rise in the cost of living would cut into their food spending. And if rice gets costlier, there would definitely be less—or nothing—to eat on the table.

Did prices spike since September? Most definitely, with oil leading the way. By March, fruits and vegetables were up 12.8 percent over one year, fuel and water by nearly 10 percent, transport and communications by 8.3 percent, and other foods except rice by 7.1 percent.

Rice too got dearer, but here it was not market forces to blame, but the government itself. Last December the National Food Authority announced a P2 per kilo increase in the price of its cheapest rice, which the poor buy. NFA raised the price to P27 a kilo. That’s an 8-percent increase, nearly twice the overall inflation rate.

Assuming each household buys one kilo of staple a day, the NFA price hike costs every poor family P60 a month more—if they have the money. If not, they go hungry.

FSP was abandoned
Besides NFA’s rice price hike, another policy move of the Aquino Administration probably worsened hunger: it stopped the Department of Education’s Food for School Program (FSP), one of the main planks of President Gloria Arroyo’s Accelerated Hunger Mitigation Program (AHMP).

Early in the new administration, DepEd suspended FSP, which gave a kilo of rice every school day to pupils of public schools in poor areas. The Aquino government criticized the program for alleged leakages and political meddling. After several weeks, DepEd tried to resume FSP, but that flip-flop hobbled the nationwide initiative.

More crucially, the Palace did not support FSP, robbing it of implementation drive. In his message last August for the proposed 2011 budget, President Aquino declared: “As a result of the zero-based [budgeting] approach, we terminated and cut programs, such as the Department of Education’s Food for School Program, which can be better administered by the DSWD by means of the proper targeting and identification of beneficiaries.” Under the current budget rubber-stamped by Congress, FSP is history.

Thus, not only did the Aquino Administration raise rice prices; it also slashed a nationwide program to distribute free rice to poor families through their kids in school. And the government did all this even after hunger escalated since September.

Moreover, there was no full Cabinet discussion about the impact of those measures on the poor, going by Vice President Jejomar Binay’s remark in January that there had been no meeting of the President and his entire Cabinet for three months.

What’s worse, the combination of higher NFA prices and hundreds of thousands poor families having to buy rice they no longer get for free, put upward pressure on prices of all kinds of rice. They now average P30 to P35 a kilo.

Add to the inflationary push the President’s repeated assertions that there was no need to import rice. That has made NFA limit its purchases of foreign grain. It has contracted to buy 200,000 metric tons so far this year, but has allocated 660,000 MT for private traders. Hopefully, the latter would release their stocks promptly to consumers.

Looming rice crisis
Now NICA warns of a looming rice crisis threatening national security. It notes that world prices are at $500 a ton, or more than P20 a kilo even before the grain leaves the port. Plus: bad weather looks set to further cut palay harvests, with major rice producers “without any exception” seeing less production.

Hoarders and profiteers must be licking their chops, while the poor brace for even more expensive staple—and less of it at the dinner table. And if PNoy is worried about the recent slide in his approval ratings, that would be nothing if the country suffers a rice shortage—the sure-fire way to end presidential popularity.

WHAT to do? Let’s make this quick and frank.

First, the Aquino Administration must set aside its misgivings about policies of the past government, and adopt those that have been proven to work in mitigating hunger.

Second, the most urgent of those Arroyo policies—boosting NFA stocks—must be implemented pronto, to show speculators that if they play around with their stocks to push up prices, the government has the grain to flood the market and make them pay. That was how then Agriculture Secretary Arthur Yap beat the hoarders when global food prices went through the roof in 2007.

Third, the Palace must revive the AHMP comprehensive hunger mitigation measures, rather than depending mainly on CCT to help the hungry. AHMP addressed a host of factors affecting hunger, not just the lack of money to buy food.

Supply-side initiatives included boosting food production with high-yield seeds and irrigation, instituting food lanes in major roads to cut food transport costs, and getting families to raise vegetables and meat in their backyards.

Demand-side measures augmented CCT with FSP, emergency employment funded by the Road Board, job training and micro-finance, among other measures.

National Nutrition Council executive director Bernardita Flores knows the AHMP inside out, and had monitored its implementation for several years, together with this writer when he was Secretary of the Cabinet. She can get this program going fast.

Enough said. Time for action. There are 18 million hungry Filipinos waiting. –RICARDO SALUDO, Manila Times

Ricardo Saludo heads the Center for Strategy, Enterprise & Intelligence (ric.saludo@censeisolutions.com). He was Secretary of the Cabinet in 2002-08 and Chairman of the Civil Service Commission in 2008-09.

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