The greedy businessmen are at it again, hiring so-called “Think Tanks” to protect their interests by painting a scary scenario of a “possible inflation” because of the directive of President Rody Duterte to the National Food Authority (NFA) to defer the rice importation until after the peak harvest season.
Early today, I read this article published by the Philippine Daily Inquirer quoting a “New York-based Think Tank” identified as Global Source which warned that “The struggle that led to the President insisting on the NFA buying local rice risks the country’s rice stocks falling further [especially if domestic farm outputs fall short of expectations] and thus, domestic rice prices spiking.”
Every time I read grim projections like this in reaction to a policy being implemented by government, I always ask myself: “Who’s behind these so-called Think Tanks?”
How could two people, never mind if they hold doctorate degrees in Economics, declare with certainty that the decision to defer the importation of rice at peak harvest season for local farmers could lead to inflation?
How I wish a “Think Tank” could also come up with an analysis on how President Duterte’s decision to defer rice importation because of the good harvest in the First Quarter of 2017 which surpassed by 210,000 metric tons last year’s production during the same period, has benefitted, not only the farmers, but the whole country as well.
I am not an Economist but I am willing to engage these so-called Ivy League-educated “Think Tanks” in a healthy debate.
Here are the very important numbers:
According to the Philippine Rice Information System (PRiSM) satellite data which were validated on the ground, a total of 4,142,960 metric tons was harvested from an area of 997,687 hectares during the First Quarter of 2017 compared to only 3,932,292 metric tons from a bigger area of 1,081,096 hectares during the same period in 2016.
In the past, when rice importation was made at peak harvest season, traders would use this as an excuse to drop the buying price of paddy rice from a high of P20 per kilo to only P14 or even P12.
With the recent announcement of President Duterte that rice importation should only be done after the harvest season, the buying price of paddy rice now by traders has gone to as high as P21 per kilo or an increase of between P7 to P9 per kilo from the previous seasons.
So, based on these numbers, let us do a simple computation.
The total production for the First Quarter of 2017 of 4,142,960 metric tons would just be a net 3,480,086 metric tons if the 16% post harvest losses are factored in.
Now, based on these figures, the farmers income out of the 3,480,086 metric tons at a previous buying price of P14 per kilo would just have been P48.7-B.
At current buying price of P21 per kilo, the Filipino farmers income for the First Quarter of 2017 was P73.08-B.
Now, that is a P24.38-B increase in the income of the rice farmers for the First Quarter alone because of President Duterte’s directive to defer rice importation until after the harvest season.
That money came from the rice traders who rake in tons of profits every harvest season because of a well-planned operation of importing rice just when the farmers are harvesting.
If the so-called “Think Tanks” consider the figures negligible, I would like to ask them if they figured out how many more farmers’ children will be able to go to school this year.
With an increased buying power because of greater income, the farmers now will be able to buy new clothes, perhaps a new TV set, a new refrigerator, a new motorcycle, a new pick-up, serve his family with beef, pork and even expensive canned goods, drink cold beer or Coca-Cola and Pepsi Cola after a sumptuous meal and perhaps go to the mall to do some shopping.
All the goods that the financially empowered rice farmers buy are produced by other Filipinos or even imported thus creating a ripple effect on these sectors as well.
At the end of it all, a better income for the agriculture and fisheries sector means lower poverty in the countryside which in the long run will lessen the migration of people to the big cities, which in the longer run will help decongest traffic and avoid the construction of more skyways and other infrastructure to address the over-population.
That in the end will result in lesser expenditures by government on infrastructure facilities in the metropolitan areas and more focus on the development of the countryside thus reducing insurgency and rebellion which cost billions of precious funds and loss of Filipino lives.
Now, here is my question to the so-called “Think Tanks:”
Have you factored in all of these things in your projection of a “feared inflation” simply because President Duterte decided to protect the Filipino rice farmers from the age-old exploitative practice of manipulating the buying price of their produce through careless importation?
Unlike you “Think Tanks” who were educated in known universities and may have even earned doctorate degrees in Economics, I just graduated from an agricultural university and a barangay high school.
The only difference is that I live out here in the real world while you are comfortable in the confines of your air-conditioned offices overlooking the Manila Bay.
I understand street economics. I live in the real world. You don’t.
Stop scaring us with your “projected inflation.” We know who you are working for.
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