“In the aftermath of this sugar fiasco, some medium term effects will not be so nice”
After a series of raids by the Bureau of Customs on several warehouses, everybody and his mother have concluded that there is no real shortage of the commodity.
The high prices obtaining in the markets are all “artificially manipulated” by greedy businessmen in the supply chain, at the expense of harried consumers, without benefiting the sugar laborers, or so they say.
In the aftermath of this sugar fiasco, some medium term effects will not be so nice.
One, agency heads and other high functionaries of government will be afraid to act decisively. The buck-passing, the “identification” of scapegoats will have a chilling effect on the entire bureaucracy.
Two, traders, always the usual suspects in the food supply chain, will think twice before stocking up on commodities in anticipation of predictable demand, or rent more warehouses at great expense, to ensure that they do not pack their bodegas to the rafters, which, seen on TV, always conjure images of “hoarding.”
All because nobody bothers to do numbers crunching, and judgment comes easy against the middlemen.
But let me tell you the truth: almost all commodities are cartelized, be it oil or grains.
I was once invited to address the International Grains Council in London, and that is where I discovered that there are just a few big-time traders of rice, wheat, corn, barley and other grains worldwide.
And why is that? Because it takes big money and long credit lines to trade profitably in commodities.
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It comes as a shocker to many that we are also importing salt.
But in 2006, while traveling in the Ilocos Region, our group went to Pasuquin and visited their salt beds. There did not seem to be such a wide expanse of salt beds that produce the less coarse and very white salt crystals that we attribute to the North.
When I asked the salt farmer how many tons of salt they produce, he let me in on a secret: that they import most of their salt from Australia, and then mix these with their Pasuquin salt.
Now newly minted from retirement Doming Panganiban, who took over the unfortunate Leo Sebastian, tells us that in truth, 93 percvent of our salt is imported from Australia and China!
Las Pinas and Paranaque salt beds have given way to massive housing projects. We have some in Ilocos, in Lian and Calatagan, and some other patches of land beside the sea. That’s about all.
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And there are the aromatics: garlic, onions, even spices such as the no longer so hot siling labuyo.
Apart from the smuggling “queen” who somehow never gets caught and, if exposed, never gets punished, we are really always in short supply of garlic and white onions.
We import some 90 percent of our white onion bulbs, and produce mostly the red variety which, while tasty, do not look good enough, whether for our bistek or the fast food onion rings.
Months back, our farmers in Bongabon in Nueva Ecija and Occidental Mindoro were throwing away or burning their red onion harvest because the prices middlemen were offering were so low they could not even cover their cost.
Why? Because mostly smuggled imports of white onions came in at the wrong time — when our local farmers were harvesting.
Now we are paying atrocious prices for these aromatics. And even chili is priced sky high, to the chagrin of Leni Robredo’s kalaylayan in Bicol.
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Last week, the president called the NFA Council and its administrator to brief him on the rice situation, worried, as he should, about the supply of our basic staple grain.
The NFA Council is such a high-caliber policy board: DOF, BSP, NEDA, DA, DTI, Landbank, DBP, plus a representative of the Office of the President (Executive Secretary) and a palay farming sector representative.
After NFA’s commercial operations have been castrated, and its annual subsidy for buying palay limited to less than 500,000 metric tons of palay (we consume 22 million tons annually), government’s current stock is good only for four days.
And because the Rice Tarrification Law left the whole trade to the private sector, NFA does not really know how much the privates have in their warehouses.
Most of our palay farmers will harvest in mid-September till October.
As it is, the US Department of Agriculture, about the most reliable when it comes to metrics of food supply and demand, estimates that our 2022 rice imports will be more than 3 million tons, next to China with a population 14 times bigger than ours.
Now, here’s more news that’s not so nice: China’s central and southern plains beside the Yangtze are suffering the worst drought ever.
The provinces affected are apart from Heilongjiang in the northeast, the biggest paddy (palay in Filipino) fields of the country, producing some 60-65 percent of their rice supply: Hubei, Hunan, Anhui, Jiangxi, Guangxi, Guizhou.
Pakistan and Bangladesh have been suffering from heavy monsoon flooding.
Now there is an informal rice trade between China and Vietnam, to include Cambodia even. Many Cambodian farmers sell their paddy to Vietnam where it is milled and re-sold to countries like the Philippines.
There is an almost 1,300 kilometer land boundary between northern Vietnam and southeastern China, where trading in commodities happens even beyond official statistics.
President Marcos and his DA officials have to act with stealthy dispatch. And apart from empty warehouses all over the land, NFA is hard put to be of assistance.
Even if there are no strong typhoons hitting Luzon and other regions along our eastern seaboard the rest of this year which will impact even in the last quarter, we will still have rice supply shortages in the first half or even the whole of 2023.
There are immediate, short-term and medium-term action plans that the DA under President Marcos’ leadership should have crafted, or are crafting, but there are also a lot of constraints, including resources, to contend with.
Agriculture is the victim of neglect and myopic planning plus the unintended side effects of the local autonomy law. Now the people are paying the wages of decades of neglect.