Adieu to Rice?

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.

The Luxury Car

Cruising down the highway after a tiring trip with my immediate circle in Subic, I noticed the signs saying 80 kph. I was the driver that time. I didn’t really expect my other companions to volunteer and sacrifice sleeping instead. So, being the responsible driver, I chose not to attract heat from the patrol and just simply follow what the sign said. Besides, the car didn’t really have the look of a law-breaker. We were riding my friend’s battered Isuzu Fuego pick-up truck, a vehicle adequate enough to perform to our needs.

As a good driver, I remembered the fundamental words I had learned from my mentors: to check out the mirrors as much as possible. Then, I suddenly noticed in the mirror that this silver piece of metal was swiftly approaching me. It’s a rule breaker! It must be going around double my speed. I grinned remembering the tales I heard that the cops are more active in catching speeding cars nowadays. I just hoped that they catch this one.

Before I knew it, the speedster was on my left side. Hearing its noise, one of my asleep friends was forced to wake, look and say, “shit pare!” Thus, I glanced as well and suddenly I felt my eyes bulge as well! What the hell?! I was so star struck in recognition of what I witnessed. It’s a Ferrari! A rare silver Ferrari F430 whose shimmer was trying to lure me out of the car. It’s a vehicle any hopeful automobile enthusiast like me will be willing to lick simply for satisfaction. My friends and I stared at it for a long while (or did its presence just make it long?). It also took a while until the “woahs” and the “wows” disappeared from us. After this experience my lust towards luxurious cars were upgraded.

The luxury car. Of course, who wouldn’t want to own one? The market offers several tempting brands such as the Benz, BMW, Audi etc. which for most of us are very present in dreams. Even if you are not so much into cars, you understand the value and prestige they offer with their name and their expected quality. I can’t wait for that day when I’ll be able to park my own Ferrari in my garage, if ever it still comes.

Then I ask myself, is there really such thing as a luxury car? After my philosophy got better, realizations between me and the real world just got better. I concluded, luxury cars do not exist (even though it was hard for me to proclaim this, I guess this is the truth). Why? Simply because, rationally speaking, every owned vehicle IS a luxury. Toyota is a luxury. Even the owner-type jeep is a luxury! I guess that simply owning any kind of vehicle is a luxury because owning a car in general already means going over what we really need.

Obviously, people need to move from point A to point B. If it’s not walking distance, we’ll need the help of a car. Basically, the need here is just transportation and that is why public transportation was invented. I could call this a second order form of need, probably staying in the same level as clothing and social life. I believe we can survive the present world without really considering of owning our own vehicle (not minding the picky).

I’m speaking in line with economics. There is no such thing as a luxury car, because every owned car is a luxury. Now this is what the rational person would say. Yet honestly, when it comes to cars, I become too irrational. This is where my own preferences and utils would come into play. If someone out there can understand me, luxury cars such as the BMW are better than the ones economically manufactured by Kia Motors. It’s always best to keep rational because you’ll be able to save a lot of money, but when it comes to things you love and desire, you’ll do anything to acquire it no matter what. These personal desires come with a force which pushes us to the limit. It enhances our ambitions which should encourage us to work harder. Thus, sociologically, if everyone has desires to make them work harder, thus, making them work harder, then good this means good news for our country’s economy. Ayos ba? Wahahaha.

So, I guess it’s not all good to be rational at all times. We need our liberal expressions and desires create ambitions for the better.

-Jon Gancayco

Please Pass the Gas

Isn’t it annoying how the price of gas seems to be increasing with each passing day? I’m not exactly affected by the recent gas hike, but I am aware that a lot of our countrymen are.

As of press time, a liter of gasoline costs as much as a McDonald’s or Jollibee value meal (I reflected on this as I was ordering a Sausage McMuffin with Egg sandwich in McDonald’s, which costs 52 pesos as of press time). Has it gone a point where people have to choose whether or not they should purchase food to sustain themselves for the day or buy a liter of gasoline to get their cars to take them to places? Rice itself is getting to be costly. With an increase in gasoline as well, how can people cope?

Most recently I received an e-mail from a colleague of mine about the recent gas hike. It goes like this:

I hear we are going to hit close to P60.00 a LITER by next summer and it might go higher!! Want gasoline prices to come down? We need to take some intelligent, united action. The oil companies just laughed at that because they knew we wouldn’t continue to “hurt” ourselves by refusing to buy gas. It was more of an inconvenience to us than it was a problem for them. BUT, whoever thought of this idea has come up with a plan that can really work. Please read on and join with us!

By now you’re probably thinking gasoline priced at about P30.00 is super cheap. Me too! It is currently P45.00/liter for regular unleaded in my town. Now that the oil companies and the OPEC nations have conditioned us to think that the cost of a gallon of gas is CHEAP at P30 – P35/liter, we need to take aggressive action to teach them that BUYERS control the marketplace. ..not sellers. With the price of gasoline going up more each day, we consumers need to take action. The only way we are going to see the price of gas come down is if we hit someone in the pocketbook by not purchasing their gas! And, we can do that WITHOUT hurting ourselves.

How? Since we all rely on our cars, we can’t just stop buying gas. But we CAN have an impact on gas prices if we all act together to force a price war.

Here’s the idea: For the rest of this year, DON’T purchase ANY gasoline from the three biggest companies: SHELL, CALTEX, and PETRON. If they are not selling any gas, they will be inclined to reduce their prices. If they reduce their prices, the other companies will have to follow suit.

It does make sense to me; however, I can’t help but wonder if it really is feasible. I mean, upon closer analysis of the gasoline industry, it’s more of an oligopoly than a monopolistic competition market. Given this current situation, we can see that there is definitely a small group of firms that dominate and control the oil prices in the market (OPEC itself controls the production and price of oil). They are price-makers–not price-takers to a certain extent. Because there are few participants in this type of market, each gasoline company is aware of the actions of the others; thus, decisions made by one firm influences and are influenced by the decisions of the other firms involved in this oligopolist market.

It makes me wonder though whether the e-mail proposal of buying gasoline from the lesser-known companies will actually work. After all, these small firms are usually price-takers instead of price-makers, because they do not have the capacity to do so. The BIG THREE companies–Shell, Petron, and Caltex–definitely dominate the gasoline industry scene. It seems highly unlikely that not purchasing gasoline from them but buying from other smaller firms will make a huge impact. After all, this is an oligopolist industry and not everyone will also adhere to the suggested method of action/response to the rising cost of gasoline (like those consumers who couldn’t care less about the increase in gas prices because they can afford the luxury of spending so much for their cars).

The only time when gasoline will probably drop here in the country is when the world market’s price for gasoline decreases. I am pretty much very doubtful that our country would be the only one to drop the prices of gasoline, considering that the world market’s price for gasoline as of press time is about $110 per liter barrel. What makes us so sure that if the Philippines decides to drop oil prices, other countries will follow suit?

I don’t know exactly what form of remedy there can be to decrease the increasing price of gasoline, but as ideal as it sounds, all I can say is that if people all over the world were to trade their cars for bicycles or if they switch to more eco-friendly methods of transportation such as solar-powered cars or hybrid cars, then the demand for oil in the world market won’t be as high; thereby; forcing the oligopolists to drop their prices.

The prices of commodities are definitely skyrocketing. With the rise of gas prices, it is inevitable that people in general will have more difficulty coping with trying to make both ends meet. On the brighter side of things, with the rising price of gasoline, there would be less cars on the road and more people taking the public transportation. That would most certainly reduce air pollution!

by Angela Eliza Lim