Philippines Caught in Rice Squeeze

The dry-season harvest is underway at a rice farm in Laguna province in the Philippines. A spike in world prices this spring has increased the price of rice sold from this farm by about 50 percent over last year. (By Blaine Harden -- The Washington Post)
Buy Photo

For nearly a century, this has meant that Filipino consumers have paid higher prices for rice than people in countries where the grain is grown more efficiently. Still, local farmers are falling further and further behind the rice-consuming demands of a country where the poor eat far more rice per capita than the rich or middle class and are by far the fastest-growing segment of the population.

To head off potential rice riots, the government reigns as the primary buyer of imported rice. Its official policy is to sell the imports to the poor at a price they can afford.

Jesus Foncardas, an unemployed father of five in Manila, was one of tens of thousands of Filipinos who queued up this week to buy subsidized rice from the National Food Authority. Its price is about 20 cents a pound, half the price of rice in stores.

"We used to ignore this government rice, but the price of rice in the stores has gone up so much," said Foncardas, 57. "I had to stand in line for a half-hour to buy from the government."

While government-imported rice is supposed to be for the poor, getting it to the poor at a price they can afford has proved difficult.

For decades, unscrupulous traders have bought this rice at the subsidized price, then repackaged and resold it at the higher market price, pocketing a handsome profit. "The system promotes corruption, with bureaucrats in the National Food Authority in cahoots with the traders," said Dy, the professor of agribusiness.

To end this pattern of corruption, Arroyo suspended the licenses this spring of thousands of retailers to sell subsidized rice in shops across the country. She ordered the National Food Authority to sell it, from government stalls and from churchyards across the country.

"I am leading the charge to crack down on any form of corruption," Arroyo said this week.

Her government has also instructed fast-food restaurants to halve servings of rice and advised Filipinos to save their rice leftovers.

So far, the most visible human consequences of Arroyo's charge are long lines of poor people standing in the hot sun in front of a limited number of the new government-run outlets, waiting to buy small quantities of the subsidized staple that the government insists is not now in short supply.

Televised images of poor people in lines "create the impression of severe shortage, consumer panic and an administration that seems to be losing control of the situation," according to an editorial Friday in the Business Mirror, the country's leading economic newspaper.

Farmers 'Making a Jackpot'

Outside of Manila, on the small farms where nearly all of the country's rice is grown and harvested by hand, the spike in rice prices has arrived in time for the April dry-season harvest.