GOTCHA By Jarius Bondoc, The Philippine Star, Wednesday, July 9, 2008
Rice prices are falling. The agriculture office’s flooding of marts with subsidized stocks has cut retail rates by P2 per kilo. And that’s significant, Sec. Arthur Yap cheers, because it’s happening during the lean months of June to September, when farmers are still into the second palay cropping of the year.
That’s good for consumers, but bad for farmers.
Most admin moves since rice prices surged in April have in fact been bad for farmers. It upped the National Food Authority buying price of palay all right, to induce private traders to try to outbid the government. But then it also raided for alleged hoarding private warehouses with big stockpiles, thus dampening private buying during the April harvest. It launched a drive for Filipinos to not waste rice on dinner tables. But it also appended a loopy tagline that farmers are having a hard time feeding the nation, clouding the fact that the more rice Filipinos eat or waste, the better for farmers. Worst, the admin imported 2.3 million tons of rice at $700-$1,300 per ton, also during the harvest. The prospect of competing with almighty government stocks further discouraged private grains buyers. Only farmers from other lands benefited from the imports.
The imported rice was what the admin used to satiate Filipinos with seven million 50-kilo sacks a month more than the usual. NFA chief Jessup Navarro boasts that by saturating 350,000 tons per month, they tripled the stocks on retail daily to 14,000 tons from the usual 3,000.
The admin has been importing at least 200,000 tons of rice since it grabbed power in 2001. It has been pointed out: there are huge kickbacks in rice imports — from the overseas rice sellers, the favored ship owners, and even the jute sack makers. Corruption is habit forming.
At least $600 million a year had been spent on rice imports in seven years. This year the bill will hit $2 billion. Imagine how far that money would have gone if poured into tools and facilities to increase rice yields. These include farm credit, irrigation, dryers, farm-to-market roads and, most important, fertilizers.
Fertilizers have proved to be the single biggest increaser of harvests. Research shows that applying four bags (two of ammonium phosphate and two of urea) per hectare results to 70-80 cavans of palay. Upping the dosage leads to higher yields: five bags (3 + 2) makes 80-90 cavans, six bags (3 + 3) makes 90-100 cavans, and the optimum seven bags (5 + 2) makes 100-120 cavans.
Mostly small farmers cultivate the 1.46 million hectares of irrigated plots and 1.36 million hectares of rain-fed lands. On their own or with local government aid, they use the minimum of four bags (2 + 2) per hectare. But that was before fertilizer prices zoomed. As oil prices spiked from $50 per barrel in 2007 to $140-plus at present, so did fertilizer production costs. So the end products, which used to sell at P700-P800 per bag, now burdens farmers with P1,800-P2,000 per bag.
Malacañang made a lot of noise recently about planning to give farmers P1,500 for fertilizers per hectare. But in the ensuing guidelines, it turned out that local governments were supposed to provide the dole. So provincial governors and town mayors howled where they’d get the money when the Palace hasn’t even remitted their rightful shares of tax collections.
And even if there was money, P1,500 is not enough, given that farmers need P7,200-P8,000 per hectare at the present market rates of fertilizers. In Silago,
Clearly, the effect of fertilizer aid would be felt in just one planting season. Conversely, a rice shortage can be expected with the present drop in fertilizer use.
But the admin is busy gloating over its pyrrhic feat of bringing down rice retail prices, which had tripled in April from P11 to P35 per kilo, by a measly P2 today. It rests its little laurels on rice imports, when the strategy should be to fertilize rice lands.
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Reacting to my piece Monday on national and local officials fleecing foreign investors they have lured in, reader Michael Sola likens them thus:
“They’re no different from extortionate cops inside the airports and hijackers of tourist vans outside. Victimized foreigners are provoked to tell the world to shun the
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