Rectify Agricultural Trade Imbalances

By Senator Edgardo Angara

We have a food crisis unlike what we have seen before. People are not dying on the streets; there is no mass starvation; but there is a crisis nevertheless. The doubling, tripling even, of food prices has caused protests and riots in countries.

If the price hikes continue, Robert Zoellick, World Bank president, said these would push 100 million people back below the poverty line, wiping out seven years of progress.

Peter Timmer, Center for Global Development fellow, thinks that the situation is actually much worse than that. If current rice prices in world markets are actually transmitted into most Asian countries, then even conservative calculations suggest that upwards of 10 million people in Asia will die prematurely.

Inequitable agricultural trade and the food crisis

The food crisis did not just happen immediately. We have blamed this on a confluence of factors that include climate change, increased demand for food, rapid increase in the price of oil, and mandates for biofuel production.

But looking deeper, this crisis is the culmination of long-standing fissures that reflect imbalances between rich and poor countries in international agricultural trade. Such inequities stem from substantial protectionism in rich countries, as well as from inequities introduced as part of the 1994 Uruguay Round Agreement on Agriculture.

As a result, 70 per cent of both world exports and imports are exchanged among developed countries. For developing countries, not only do we have a smaller share of world agricultural trade but we also have been experiencing a deterioration in the balance of trade between exports and imports.

In the early 1960s, we, developing countries, had an overall annual agricultural trade surplus of almost US$ 7 billion. By the early 1970s, our trade surplus fell to about US$1 billion. By the end of the 1980s, it had disappeared. And since the beginning of the 1990s, we have become net importers of food and have incurred deficits.

The implications of such dependence on food imports are staggering. It has affected our ability to pay for imports; it has decreased our local production of food; it has brought incomes, especially of farmers, down; and it has stunted our nutritional status.

What needs to be done now

To rectify this trade imbalance and thwart a developing global food cartel, there is an urgent need to:

1. Accelerate the elimination of export subsidies and reduction of domestic subsidies of rich countries...

2. Cut agricultural tariffs; provide Special Products; and institute Special Safeguard Mechanisms...

3. Ensure that legitimate measures are not used as technical barriers to trade...

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You need something that I have which you don't have; I need something that you have which I don't have. Let us help each other so that we may meet each other's needs.

Help me in producing more of my product so that there will be enough of my product for us to share. I will help you in producing more of your product so that there will also be enough of your product for us to share.

Let me bless you with what I have so that you may bless me with what you have. Isn't this the spirit of true fair trade?

Contrast that with the spirit of unfair trade: Let me lure you with what you want to have so that I could get from you what I want that you have.

Can NFA Rice Importation & Hoarding Be Stopped?

Here is an interesting simplistic analysis made by a reader of Philippine Star on the subject of rice self-sufficiency.

For now, these rice crisis can still be solved. granting that there are 90 million Filipinos and everyone eats an average of 2 cavans of rice per year, that translate to a demand 180 million cavans of rice to be met every year.

In 1982, my father was able to harvest 96 cavans of palay in half hectare of ricefield. from that period to the present, some farmers now harvest up to 350 cavans of palay from one hectare of ricefield. but lets just be conservative and base our computation in the technology of rice farming in 1982.

If 96 cavans is harvested in half a hectare, that means 192 cavans of palay can be harvested in one hectare in one cropping. there are two croppings in one year so that in one year, a hectare could yield 384 cavans in one year. a ricemill with 65% recovery therefore could yield 250 cavans of rice per hectare in one year granting there are only two croppings.

If we divide the annual demand of 180 million cavans of rice with the annual yield per hectare of 250 cavans, the Philippines need only 720,000 hectares of ricefields to meet the annual demand of rice. what this means is that, the Philippines can be self-sufficient in rice and can even export considering that 2.7 million hectares are devoted to rice farming.

And now the million dollar question: why are we not self sufficient when the technology is available to harvest palay up to 350 cavans per hectare and there is more than enough farmlands to plant rice?

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Hoard = to accumulate and hide or keep in reserve.

Haggling Over Federalism

A Proposal Lacking A Consensus
By Manuel L. Quezon III
Philippine Daily Inquirer

Even as the House is poised to begin discussions with the Senate on Sen. Aquilino Pimentel's federalism proposal, the public has a lot of catching up to do, beginning with getting its hands on the actual text of the Senate's resolution and then dissecting it. The public needs to do this, because once the House starts haggling with the Senate over federalism, the public could end up squeezed out of the discussion...

In theory, I'm keenly interested in federalism, and in principle, I'm supportive of it; but my approach is based on the premise that we should retain a bicameral legislature and the presidential system. This is not a basic approach shared by other proponents; there are even proponents of federalism who think it would essentially abolish a national government, when federalism might actually strengthen some national powers while freeing up states to enjoy wider powers in certain areas.

Pimentel's proposal will create federal states without having consulted the provinces on whether they're comfortable with the composition of federal states and the designated state capitals (e.g., for the State of Northern Luzon, composed of Ilocos Norte, Ilocos Sur, La Union, Pangasinan, Batanes, Cagayan, Isabela, Nueva Vizcaya, Quirino, Abra, Apayao, Benguet, Ifugao, Kalinga and Mountain Province, with Tuguegarao City as the state capital; the Cordilleras, for one, won't be happy about this; or for the State of Central Visayas, with Masbate, Negros Oriental, Cebu, Bohol and Siquijor, Toledo City will be the state capital and Boholanos won't be happy about this and might bring up the question of "Cebuano imperialism.") The location of Congress in Tagbilaran City, while the Executive branch remains in Metro Manila, is lunacy (there's a reason all other federal capitals have their institutions in one place; it makes more-but not much more-sense to move the Federal capital to the Visayas or Mindanao)...

It would be unfair to say that Pimentel's proposals are carved in stone; they are exactly what they purport to be: proposals. Subject to discussion, and negotiation. But these are proposals of such ambition that they deserve the fullest public participation in their eventual outcome.

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Missing The Opportunity To Bless Your Workers

Employers Nix Wage Hike
By Charo Logarta
ABS-CBN News

The Japanese Chamber of Commerce and Industry of the Philippines (JCCIP) is against any increase in minimum wage, saying that it will be detrimental to the competitiveness of various industries that also are grappling with high commodity prices.

The National Capital Region (NCR) Tripartite Wages and Productivity Board held its consultation with employers and businesses Friday, following its meeting with the labor sector Thursday.

"The [Arroyo] administration and the labor sector should seriously consider the fact that the minimum wage of the country is already the highest in the region," said the JCCIP, in its position paper to the NCR Wage Board.

"There is mismatching between minimum wage levels and productivity in the Philippines that will lead to further deterioration of the Philippine economy if another wage hike happens," it said.

The JCCIP warned that many companies may be forced to lay-off workers, especially if the higher overhead costs cannot be passed on through higher prices for products and services.

"A further increase in the minimum wage means 'just scatter money nationwide.' It will push up end-user prices of goods and services, and this only contributes to the vicious cycle of upward inflationary trend. When the minimum wage is high, there is little room for management to reward workers who are more competitive and productive than others," added the JCCIP.

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Indeed it is very hard to strike a balance between increasing the minimum wage of the workers and protecting the employers from going out of business because of high labor costs -- especially when the decision is to be made in the middle of a crisis.

A crisis can also be a catalyst for a positive change. Sometimes all it needs for a company to grow and move forward are the challenges and the hidden opportunities that a crisis brings.

In times of crisis, only very few companies are not afraid to take the risk of prioritizing the welfare of their employees over their profit. It is remarkable that when the crisis is over, those companies grow even more than before.

There are many management and business principles that companies are following in handling crisis situations but only few managers are willing to apply the following principle: It is better (not bitter) to give than to receive.

“Give, and it will be given to you: good measure, pressed down, shaken together, and running over, will be given to you. For with the same measure you measure it will be measured back to you.” (Luke 6:38)

When God is about to increase your blessing, He will first initiate the expansion of your capacity -- usually the initiation is in the form of a test (a crisis). What is being tested is not your endurance or your survival ability, but rather, it is your giving ability, your generosity, your kindness, your concern for others -- nothing will test greatly our generosity than when we have less to give. The very reason for God increasing more our blessing is for us to be the channel of His blessings to others.

Companies do not exist just to gather wealth for the banks. They are there to be bearers and channels of God's blessings to the people. Many of them are experiencing the seeming difficulties that today's economic crisis has brought, but how many of them realized that this is a great opportunity for them to remain faithful to the Lord.

If not now, then when? When was the last time employers have given their employees a fair wage increase? Isn't now an appropriate time for a wage increase to be appreciated so much by the workers? Don't miss a God-given opportunity -- for His works are hidden in disguised opportunities.