Adieu to Rice?
May 21, 2008
Recently, I was able to read an article from the Time magazine regarding the rice shortage crisis that has hit Asia by storm. I was particularly interested with this article because I for one am a rice lover. I cannot imagine living the rest of my life without having rice with my meals. It simply won’t do. How can there be a rice shortage? It was quite disturbing to think of this absurd reality. However, as absurd as it may sound, it is real, it is happening and we should deal with it.
As I have learned, most Asian countries have been dealing with it, among them the Philippines, where the government has plans of issuing charges of economic sabotage to rice hoarders, a crime which is punishable by sentencing one to prison forever. This is the case here in our country because apparently, once word got around concerning the rice shortage, several people saw this crisis as an opportunity to make money and took advantage of the inelastic demand for rice by collecting the subsidized rice distributed by the government and by selling them for higher prices. Demand for rice is inelastic for Asian countries because there is still no other good that can replace rice as a major component of a meal. With this said, no matter how high the price of rice goes, the market will still inevitably buy rice considering how essential it is in most Asian diets.
The question is, why the sudden rice shortage? The crisis unexpectedly popped out of nowhere and caused hysteria all over Asia. According to the Rice Institute, we had it coming for a couple of years. Apparently, the world is consuming more than it is producing rice, where worldwide rice consumption rose by 0.9% last year while production rose to only barely 0.7%. As we can see, if this trend continues for the next few years, we might just have to face a rice-less world in the future. As of now, each country is looking out for its own welfare, and countries such as China and Vietnam have imposed export limits to be able to retain domestic rice supply for their own good. As this strategy may seem wise, it is not however a very helpful plan for the future and for their neighboring countries since this would just push global prices higher. I think that every Asian country, especially the Philippines, must first focus on how to make more rice rather than focusing on how to regulate their rice flow and this can be done by diverting their attention to improving Agricultural techniques. After all, isn’t our country known for its diverse ecosystem and rich soils?
- j.uy
Addison A., Horn, R., Overland M., Rauhala E., Robinson S., Tedjasukmana J., & Yang L. (2008, April 21). No Grain, Big Pain. Time, 32-35.
Bye bye rice? Ok lang pampapayat haha! Anyway, I agree that prices would shoot up if rice cartels and export quotas were to be imposed by other sustainable Asian countries. Worse, rice is inelastic. If the Philippines would not solve this issue on the grassroots level (meaning finding techniques to make rice production here in the country more efficient), then what we’re seeing is just a preview of an economic tragedy (or triumph for rice cartels). Well, tragedy for us Filipinos because just like fuel, we would succumb to oligarchic cartels producing rice which is very much a necessity, and a staple which has no real substitute (imagine kaldereta with kamote?! or corn!? eww!! rice pa rin!!). So I guess, international intervention coupled with local governmental initiatives to address this imminent tragedy would already be enough to control rice prices and supply. International intervention meaning the prohibition of the formation of rice cartels (kahit rice cartels lang, pagbigyan na natin yung export quotas) which would definitely scare the hell out of us, thus driving prices up. Local governmental initiative to pursue long-term rice sufficiency programs which would somehow calm down investors and suppliers and hopefully even the prices, and perhaps prepare the country for future needs.
P.S. May economic tsismis ako, I forgot kung sino nagsabi sakin, pero the rice crisis DAW is brought about by the dismal real estate industry in the U.S. Since foreign investors there are already losing money, they invest here then hoard rice, eventually raising prices and getting the money they lost in the U.S. Tsismis lang yan pero makes sense! Haha!
I don’t really know know a lot about the subject save for what I hear from my cousin in the fertilizer industry. Apparently, the prices of some fertilizers have shot up since the beginning of this crisis up to twice its original price. According to her, and her inside sources, this is not the result of hoarding as the government has claimed it to be. There is a general food shortage across the globe as the world population is rising and climate change is affecting food production.
Your final comment is actually quite accurate. The International Rice Research Institute is actually based here in the Philippines and we are known to be an agricultural country so our inability to produce sufficient rice to meet our needs is nothing short of embarrassing. Why is it that Vietnam and China have been able to export rice while we have to continuously import it? Is it overpopulation? Under-production? Or is it the government’s mismanagement of our agricultural sector?
People need a certain number of calories to survive, and an inferior good such as rice does the job. In our context, even if rice prices go up, meats would still be much much more expensive.
Filipinos/Asians whose take-home salaries would be affected by rice price increases, would not be able to afford the luxury of cooking meat (a normal good) like they used to. However, they still need those calories, so rice-to-meat consumption would actually increase instead of decrease. Therefore, rice is a classic giffen good.
Lemme illustrate: I had immersion last year July and the rice-to-meat ratio of the meals I had with my foster aeta family is like 9:1, pero hindi ka parin gugutumin kasi kahit walang ulam for the day, andyan parin naman ang rice, toyo and vinegar.
The next time you eat at a buffet, observe the rice-to-meat ratio on your plate. Since there is an abundance of a normal good to go around given that you can afford the buffet tab, rice is noticeable a smaller portion, reserved to neutralize the palate.
Bins is also right. Our self-sufficiency as a rice producer is on a continuous decline for as long as pop growth rate increases, rice cartels thrive and global temperatures soar. Who knows, we might be importing US rice soon.
I guess this proves how people can get selfish and get disillusioned when looking out for themselves. I don’t think the countries see that if they work together they can aid everyone in the rice crisis. This crisis will hit the Philippines hard, with our love for rice. Good article!
To decrease the problem on rice shortage, we could really look into other options–such as bread or pasta–for our daily carbohydrate intake
its kind of surprising the Philippines is importing rice instead of exporting it?
its government’s fault! their negligence on agriculture is to blame! they like doing things last minute, and only when a disaster happens. its also our fault for voting these people into office and also our fault for not taking interest in government.
I’m not very well-versed in agriculture, but I’ve read somewhere that farmers barely plant enough rice to sell–most of it goes to their own diets. That said, how much rice can a person plant? How many people can that rice feed?
My guess is that it’s not so much a problem of government or population (seeing as these have been problems we’ve been facing for the past how many years), but rather the basic premise our diet is built upon. We could eat like the French and solve the problems of rice shortage and obesity at the same time.
i heard the Chinese’s newfound affluence has something to do with the rice shortage.
My teacher once said that all the people in the world can live in Texas, and the population density would be much less than what we have in Manila. Then, the rest of the world can become places for agriculture. It’s so sad that we never realized that, and now we’re all competing for a place to stay and food to eat.
This is a symptom of too much importation of rice from other countries…
Despite not being able to produce much, we were able to get sufficient rice from nearby countries…
Since the green gas movement—rice filed being converted to ethanol farms— they [countries where we get most of our rice] are forced to cut down on their exports… hence rice shortages…