Rice as political fodder
BEN KRITZ
IN the Philippines, rice is not just food. It is a form of currency by which political capital is exchanged.
For the past few weeks, rice has been a key debate topic, as the country’s demand for it has been hampered by reduced supply and high prices.
High rice prices are generally presumed to be partly responsible for the Philippines’ currently out of control inflation rate, and the situation is about to become even worse: The latest estimates from the Department of Agriculture are that nearly 500,000 metric tons of ready to harvest rice in northern Luzon worth almost P9 billion were lost due to last weekend’s Typhoon Ompong.
The Philippines is not the only country in the world where rice makes up the largest percentage of the average
person’s dietary intake. As a staple food, rice is ideal. It has a reasonable amount of nutritional value, a large amount of caloric value per volume, requires only simple processing to convert it to an edible form, does not require any sort of special storage provisions other than being kept dry, and has very long shelf life.
Despite the impression left by the frequent public anxiety over rice prices, it is still by far the cheapest available food on a per unit volume basis here or anywhere else in the world. It is not a coincidence that, except for a few outliers like Korea and Japan, the rice-eating world comprises countries that have very large impoverished populations.
The difference between the Philippines and other countries where rice is the largest component of the average individual diet is that, there, that proportion closely reflects the country’s capacity to supply the staple.
Here, the proportion of rice in the average person’s diet never fluctuates (it’s about 40 percent of the average Filipino’s caloric intake). Through a combination of limited options for substitutes and cultural hard-wiring, if a Filipino does not have rice, he goes hungry.
This is why rice has become political currency in the Philippines. Like petroleum, rice is a commodity with a highly inelastic demand and insufficient domestic supply. That being the case, the government can take advantage of the circumstances in one of two ways. It can monetize the demand as it does with petroleum products, levying customs duties on imports and excise taxes on consumption. Or it can exercise the option it has chosen instead, which is to use the commodity as a political tool. It does this by styling satisfaction of the demand for rice as a responsibility of governance, and then using the relative success or failure to satisfy rice demand as an overall scorecard for leadership effectiveness.
The only way the model remains useful, however, is if fulfilling the demand for rice never quite reaches 100 percent; thus the rice economy is kept in a constant state of low-grade crisis, always just slightly deficient in terms of supply or affordability in order to give political leaders a problem to “fix.”
That is a delicate balancing act to maintain, and every administration back to at least the Marcos era has flubbed it at least once during its term. The current bungle the Duterte administration has gotten itself into is more spectacular than other rice “crises” of the past decade, but is otherwise not really that unusual or surprising.
The most rational course for the Philippines to take if it wants to avoid recurring “rice crises” and the impoverishment and other negative economic effects they cause is for government to get out of the rice business altogether.
Abolish the National Food Authority as a regulator and supplier of the staple, and convert it to a relief agency concerned only with keeping a supply of rice – and for that matter, other food products, since its name is not “National Rice Authority” – for public assistance to people affected by calamities or profound indigence.
Let the Department of Agriculture focus on regulation and development for the purposes of maximizing the business efficiency of the rice-producing sector without reference to a volume target, but rather a competitive one.
Impose a reasonable schedule of tariffs on rice imports in line with existing trade agreements (the rice tariffication bill now in the final stages of the legislative process will go a long way toward achieving this), and let market demand dictate trade activity.
Of course, doing all that will initially cause some pain, and most of it will be borne by the lower economic classes. Many rice farms simply unviable as businesses will disappear, be absorbed by larger, healthier competitors, or be converted to other purposes, with a corresponding loss or shift of jobs.
The cheaper rice varieties – the barely edible kinds bought and sold at very low prices by the NFA and its authorized dealers now – will largely disappear as farmers, no longer being subsidized, will switch to more cost-effective and profitable varieties.
Rice prices will drop overall, but the lower end of the price range will be higher, which will inevitably impose some degree of economic hardship on lower-income families.
Some degree of transitional assistance will probably need to be implemented to help those affected by the change, but it should not become permanent, in order that more rational and productive aims of more diversified agriculture and basic diets can be achieved.
In the long run, however, the country will be much better off; affordable food security will be assured, and the bar of poverty, though it is unrealistic to hope it will be eliminated, will at least be raised so that the poorest Filipino families are relatively better off than they were before.
But, none of that is likely to happen unless a profound change in the way the country is governed takes place, because the most important thing that will be lost in that sort of transition is the political tool that rice is now.
Never mind that the Philippines will have a stronger, more stable economy and social framework. It is inconceivable that, at least for the next couple of generations, any Filipino politician would willingly work for that if the tradeoff is the elimination of the currency with which political leaders pay to keep their places.
ben.kritz@manilatimes.net
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