Philippines Caught in Rice Squeeze

Complicated Blend of Economic Factors Requires Government Action, Experts Warn

MANILA, April 11 -- More than anywhere else in Asia, the soaring price of rice has become a good-vs.-evil drama in the Philippines, one of the world's largest importers of rice.

Traders who fiddle with the price of the nation's all-important staple now face life in prison. Police are raiding warehouses in search of hoarders. Soldiers and police have been mobilized to help sell government-subsidized rice to the poor.

"Anyone caught stealing rice from the people, we will seek to throw in jail," President Gloria Macapagal Arroyo warned this week, as part of her high-profile crackdown on rice cheaters.

For all of Arroyo's theatrics in recent days, the fundamental reasons behind the recent spike in rice prices -- in the Philippines and across the world -- are neither new nor part of a morality play.

As experts have been warning for years, the cost of growing rice -- thanks to much higher fuel and fertilizer prices -- has been rising faster than the price paid by consumers. At the same time, yields on rice farms have leveled off, as spending on agricultural research has declined. And consumption of imported rice has increased sharply, especially in Africa.

Something had to give. The world price of rice has jumped by close to 80 percent since January 2007. Not all of that increase has yet been felt by consumers here, but retail rice prices are up by 20 to 30 percent, and prices paid to Filipino farmers for their spring crop have jumped by as much as 50 percent.

"The price of rice is going to stay high," said Robert S. Zeigler, director general of the Philippines-based International Rice Research Institute.

Governments, though, can almost certainly guarantee an abundant long-term supply of rice in most of Asia, according to Zeigler and many other experts. "We can deal with these challenges, if we have good government policies and long-term investment," Zeigler said.

As explained by rice researchers and farm economists, the solutions are as simple as better maintenance of irrigation ditches and as complicated as developing a new generation of fast-growing rice.

But in the Philippines, at least so far, the government has made few commitments to long-term solutions. It is confronting the rice crisis with moves that grab headlines: threats of lifetime prison sentences, warehouse raids and troop deployments.

A Perverse Effect

In international trade, rice is an unusual grain. About 7 percent of world production is sold across borders, far less than wheat or corn.

In most Asian countries, the bulk of the crop is kept at home, because rice is much more than a mere food. It is a strategic, riot-preventing political resource -- an emotionally resonant symbol of plentitude and proud self-reliance.