Implications of RP Food Crisis

Government announced it has allocated P 43 billion to solve the food crisis. Economic adviser Joey Salceda warns that this food crisis is "worse than political" and it may last until 2010. His boss, Mrs. Arroyo quickly corrected Joey's statement to say that it's not a "food" crisis; rather, it's just a "rice price" crisis. Former NEDA secretary Diokno rebuked Mrs. Arroyo by saying that this crisis has put an enormous strain on the economy, which Catholic Bishops Conference of the Philippines (CBCP) attributed to a "governance crisis".

What has been gleaned so far, based on my readings on the issue is this:

1. There's really a global food crisis. Prices of commodities have risen to unaffordable levels. Peoples of non-industrialized countries are finding it extremely hard to buy their staple commodities. Explanations were given by various government and research institutions. There's an increase in demand which can't be solved by production. Global warming is said to have caused massive infrastructural and production damages. Rising prices of agricultural feeds & fertilizers, lack of irrigation systems and shortage of farmlands impact on production.

2. Personal incomes cannot support food prices. People line up at NFA warehouses because they can't afford buying commercial rice which has risen to astronomical proportions since government announced a rice shortage. Prior to this though, suppliers and traders of flour, cooking oil, lpg and meats already told government that they can't avoid raising their prices.

3. It is really a food crisis, not only a rice crisis. Mrs. Arroyo's claim that what's happening is not a food crisis is outright baloney. Bull. There's a food crisis, not because there's a lack of stocks. No. It's a crisis because people can't buy food. Simple. You don't need to be an economist to know that. You have a quarter of 90 million who are, right now, slowly dying because they can't eat enough food.

Prognosis

From that 90 million people, only 25 million have jobs. Philippine Chamber of Commerce and Industries president Sergio Ortiz says 70 percent of that figure belong to the informal sectors, meaning those who work menial jobs and are contractual. This sector are the ones being severely hit by this food crisis and should be given emergency assistance.

The remaining 30 percent endure the brunt of high prices. They have the capacity to buy but this is slowly being affected by high inflation.

Solution

On a short-term basis, government should immediately force food traders to take out their stocks from their warehouses. Based on reports, there are enough stocks to feed people, but unscrupulous traders are actually hiding them to force price increases. Government should arrest all of them and charge them and confiscate their stocks.

These stocks should be distributed in the market under controlled conditions. Meaning, DTI should effect price monitoring and regulate. Arrest and prosecute government officials who will be caught selling these stocks back to commercial traders and retailers.