Global rice deficit seen at 6.7-M tons in 2010

Posted at 12/11/2009 12:00 PM | Updated as of 12/11/2009 12:45 PM

MANILA, Philippines - London-based research company Business Monitor International (BMI) is now looking at a global rice deficit of 6.7 million tons next year, following significant storm damages to the Philippines' key rice-producing areas.

BMI also cited India's need to tap the international rice market in 2010 for the first time in 21 years due an erratic monsoon, resulting to an upward pressure on rice prices.

"The world's largest rice importer [Philippines] has recently begun to ramp up imports. We now project a global rice deficit of 6.7 million tons in 2010, rather than the previously anticipated balance," BMI said in the Asia edition of its Global Macro Monitor.

Five firms have offered to sell rice to the Philippines at $618.95 to $768.50 a ton, including cost and freight, at an import tender for 600,000 tons on Tuesday, up from offers at a tender for a similar volume last week. (Read: Offers at RP rice tender rise further)

The tender was the second of the 3 of the same volume scheduled for this month as the Philippines secures 2010 supplies after typhoons "Ondoy" and "Pepeng" (international code names Ketsana and Parma, respectively) destroyed crops. With a report from Reuters

 


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Misplaced government priorities to blame for our food woes.

Because we are not self-sufficient in rice, because we are largely dependent on importation for our rice needs, the country has a precarious level of buffer stock of rice. In short, our food security situation is very insecure.

Let’s look at the facts. In the 1970s, we were not only self-sufficient; we were a net exporter of rice due to vigorous government investments in irrigation. Today, we are the biggest rice importer in the world.

In 1975, the irrigated areas nationwide totaled about 1.1 million hectares. Today (2009), it is 1.4 million hectares. Compare that with the country’s population: in 1975 it was 42 million while today it is 89 million. In other words, while the population grew by 119%, the irrigated areas nationwide grew at a piddling 27%.

Based on a JICA study, the rice consumption of the county in 2007 was about 11 million tons, but our domestic production was only about 8 million tons. The rest we imported. I think it is fair enough to say that this is the typical picture of our country’s annual rice supply-demand situation.

Based on NIA’s draft corporate plan, for the fifteen-year period from 1993-2008 the NIA submitted a total budget of P130-B, for an average of P 9-B per year. But only P 67-B of such budget requests, or an average of P4.5-B per year, was funded. In other words, only 50% of NIA’s annual budgets were actually funded.

This is the biggest culprit why we are having rice supply problems today: the years of relative neglect or gross lack of investment by the national government for the irrigation program of the country.

Broadly, NIA’s annual capital outlays are needed to address two things: (1) repair and maintenance of existing irrigation systems, and (2) construction of new irrigation projects to cope up with the increasing rice consumption of a constantly growing population.

Given that the national government only allocated funds for NIA’s budget at only 50% of requested amounts for the last 15 years, it is clear that most of that money went only to repair and rehabilitation of existing irrigation systems. This explains why the country’s total irrigated area has had a miniscule increase over the decades.

Some uninformed people say that the reason why we cannot produce enough rice is due to our limited land area. Nothing can be farther from the truth.

The country’s total area planted to rice is 3.9 million hectares. Only 1.4 million hectares are currently irrigated. Try to imagine the huge tracts of rain-fed rice farms that have the capacity to produce four times more rice per hectare (double the yield per hectare plus double the number of times to harvest per year), if provided with irrigation facilities.

How precarious is our food security situation if we continue to rely on rice importation for much of our consumption?

With all the crazy typhoons occurring worldwide nowadays, if those kinds hit Vietnam and Thailand, where we import most of our rice, and greatly reduce their rice harvests, which is not at all unlikely, where do we buy rice? And at what steep price?

What about a widespread El Nino, which, for all we know, is just lurking around, waiting for the typhoons to leave? If it hits Vietnam and Thailand (and the Philippines, for that matter), all at the same time, which is not at all unlikely, God forbid, where do we buy rice? And at what steep price?

I dread to see the day when we will not have enough rice for all Filipinos; or if they are available, that they are imported at exorbitant prices that most poor Filipinos can’t afford to buy them.

The national government should put its priorities right—food security is the most basic and most important of the people’s rights. Pour huge investments in irrigation projects NOW!

What do you do with expensive fancy highways, bridges, tourism infrastructures, etc. if people are hungry?

Ismael D. Tabije, Publisher www.BestManagementArticles.com


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