I wrote this for somewhere else, but x-posting here as its relevant to the thread.
The 2008 Philippine Rice Supply Shortage in bullet points:
Philippine Facts:
- There is a shortage of rice in the Philippines
- The Philippines will import about 2.6 million tones of rice in 2008
- Importing will cost the country a net loss of about $1.3 billion, or 1% of Gross Domestic Product (GDP)
- The Philippines has nearly doubled its rice output in 1998, but it has not been enough to account for population growth
- The Philippines outpaces Thailand, the world’s biggest rice exporter, by 3.6 million tones to 2.6 million tones per hectare.
- Over the past 20 years, the Philippines has lost half of its irrigated land to urban development (such as golf courses).
What the government is doing:
- Spending money (see above) on importing rice and selling it at local prices
- Cracking down on rice hoarders on grounds of “economic sabotage”, a crime which carries a life sentence
- It has secured deals with other countries to ensure rice imports
- Soldiers are being deployed to guard rice deliveries to poor communities
- The DoA is trying to implement “Bagsakan” centers where farmers can sell their goods directly to consumers, thus eliminating the middle men
- Improving rice yields in the long term through better irrigation, research and the elimination of anti-competitive elements in the rice market
Source: Credit Suisse, the Inquirer and the BBC
1. http://business.inquirer.net/money/topst...dit-Suisse
2. http://news.bbc.co.uk/2/hi/south_asia/7324596.stm - a look at how other Asian countries have been affected by rising food prices
3. http://business.inquirer.net/money/colum...ood-crisis
Global Facts:
According to the UN Food and Agriculture Association, rice prices have risen by 70% in the past year.
This was caused by a number of factors, which mainly include: (1) global population growth, (2) the economic “miracles” in China and India, because rich people eat more food. (3) Climate change, due to accelerating desertification of arable land and unpredictable weather which causes both flood and drought, (4) shifting production of food to ethanol in countries like the US – all these factors combined contribute to the rise in global food prices.
For rice, other suspected reasons for the recent increases are rice hoarding due to expectations that the price of rice would increase even more, low stockpiles of the staple, and the industrialization and urbanization of arable land. Importing rice will also become more expensive, as currently only 7% of all rice produced globally is traded in the international market.
Source: BBC
http://news.bbc.co.uk/2/hi/business/7341978.stm
Further Reading:
http://globalnation.inquirer.net/cebudai...ction-data -- The government’s rice data is wrong
http://business.inquirer.net/money/colum...me-no-rice -- More on what the Arroyo administration is doing to address shortage fears
http://globalnation.inquirer.net/mindfee..._id=129257 – More information about what is causing the rising prices domestically
My Analysis: If rice prices continue to rise at 70% per year given current trends, then yes it can be considered a crisis. There will be a lot of people in the country that will literally starve to death if they are not granted government assistance. We have to think about where the government will get the money, as it has already operated on a budget deficit over the past few years. About 20-30% of the national budget goes to corruption expenses, so officials will have to learn to either take a smaller cut from deals or risk angry rioters burning down their gilded mansions.
The 2008 Philippine Rice Supply Shortage in bullet points:
Philippine Facts:
- There is a shortage of rice in the Philippines
- The Philippines will import about 2.6 million tones of rice in 2008
- Importing will cost the country a net loss of about $1.3 billion, or 1% of Gross Domestic Product (GDP)
- The Philippines has nearly doubled its rice output in 1998, but it has not been enough to account for population growth
- The Philippines outpaces Thailand, the world’s biggest rice exporter, by 3.6 million tones to 2.6 million tones per hectare.
- Over the past 20 years, the Philippines has lost half of its irrigated land to urban development (such as golf courses).
What the government is doing:
- Spending money (see above) on importing rice and selling it at local prices
- Cracking down on rice hoarders on grounds of “economic sabotage”, a crime which carries a life sentence
- It has secured deals with other countries to ensure rice imports
- Soldiers are being deployed to guard rice deliveries to poor communities
- The DoA is trying to implement “Bagsakan” centers where farmers can sell their goods directly to consumers, thus eliminating the middle men
- Improving rice yields in the long term through better irrigation, research and the elimination of anti-competitive elements in the rice market
Source: Credit Suisse, the Inquirer and the BBC
1. http://business.inquirer.net/money/topst...dit-Suisse
2. http://news.bbc.co.uk/2/hi/south_asia/7324596.stm - a look at how other Asian countries have been affected by rising food prices
3. http://business.inquirer.net/money/colum...ood-crisis
Global Facts:
According to the UN Food and Agriculture Association, rice prices have risen by 70% in the past year.
This was caused by a number of factors, which mainly include: (1) global population growth, (2) the economic “miracles” in China and India, because rich people eat more food. (3) Climate change, due to accelerating desertification of arable land and unpredictable weather which causes both flood and drought, (4) shifting production of food to ethanol in countries like the US – all these factors combined contribute to the rise in global food prices.
For rice, other suspected reasons for the recent increases are rice hoarding due to expectations that the price of rice would increase even more, low stockpiles of the staple, and the industrialization and urbanization of arable land. Importing rice will also become more expensive, as currently only 7% of all rice produced globally is traded in the international market.
Source: BBC
http://news.bbc.co.uk/2/hi/business/7341978.stm
Further Reading:
http://globalnation.inquirer.net/cebudai...ction-data -- The government’s rice data is wrong
http://business.inquirer.net/money/colum...me-no-rice -- More on what the Arroyo administration is doing to address shortage fears
http://globalnation.inquirer.net/mindfee..._id=129257 – More information about what is causing the rising prices domestically
My Analysis: If rice prices continue to rise at 70% per year given current trends, then yes it can be considered a crisis. There will be a lot of people in the country that will literally starve to death if they are not granted government assistance. We have to think about where the government will get the money, as it has already operated on a budget deficit over the past few years. About 20-30% of the national budget goes to corruption expenses, so officials will have to learn to either take a smaller cut from deals or risk angry rioters burning down their gilded mansions.
