Food worries

"Food security is national security."

The nation and our government are in deep crisis.

All because of the spread of the coronavirus labelled by the WHO as COVID-19.  And all because our health system is largely unprepared for the magnitude of this pandemic. To be fair, many other countries, wealthier and more advanced than we are,  are not prepared.

We look at countries like Germany and tiny Singapore, South Korea and even Taiwan, and we see the death ratio to COVID cases as being extremely low.  For Germany, it is one tenth of one percent; for Singapore, one third of 1 percent; South Korea’s ratio of death to identified cases is similar to Taiwan’s, at 0.016 percent.

But we wonder why rich countries like the USA, Italy, Spain, France and the UK are registering higher mortality rates: highest for Italy with 11.4 percent; Spain with 8.8 percent; France with 6.8 percent, the UK with 6.3 percent.  The USA now has 163,479 identified infection cases, with 3,148 deaths, at this point a lower 2 percent. The governor of New York is worried it will go much higher, while their president, Donald Trump, seems quite befuddled as he tries to out-lie his previous lies on the “China virus.”

Ours is about 5-percent mortality at an identified  1,546 cases as of Monday evening, but at the rate our doctors and nurses are dying, and at the rate they are dropping out of fatigue and demoralization, giving the lack of facilities and equipment, we worry that first, we haven’t seen the peak rate of infection, neither the mortality rate that is likely to go higher.

Which brings us to the question of whether our government leaders can lift the lockdown by Easter—Pasko ng Pagkabuhay. 

DILG Sec. Eduardo Ano (one among the troika of lockdown implementers) wants it lifted as originally scheduled because of the effects on the economy.  At the rate our health system and its top official are wading through uncertainty and indecision, Ano’s desire may be more of wishful thinking.  

We haven’t reached the peak of the health crisis; reasonable estimates place the peak being reached in mid-May at best, even mid-June. I hope, I pray these are wrong, by some miracle of faith.

Let me zero in on just one major, major aspect of the economic fall-out—food.

This is the third week of the lockdown. How much of our emergency food inventory (rice, canned goods, instant noodles, the kind that are being packed for distribution to the no-work, no-pay population) has had a demand and supply shock, and will continue to dwindle in the next two weeks? Let alone an extension due to an unabated state of the nation’s health breakdown?

Food manufacturing facilities have either closed, or are on the verge of closing.  First because workers are discombobulated; second, because supply chains are disrupted; third because of port congestion, a logistical problem brought about by the extensive quarantine, and many other unexpected disturbances of the normal conduct of business operations.  In a previous article I mentioned the “just-in-time” (JIT) normal practice of procuring raw materials and supplies as close to processing as possible, for cost economies.

The JIT impacts on supply, while the emergency creates an unforeseen high demand, with LGUs and the national government procuring food supplies much faster than they would normally do in times of natural calamities such as typhoons and earthquakes, the former just around the corner after the “peak” is reached and the COVID infection curve flattens.

The best scenario would be to move from an Enhanced Community Quarantine, which is the present norm, and downgrade into some kind of modified lockdown, allowing for curing the disruptions as best as possible, so that economic activity would have a semblance of normalcy.

But that again would depend on the ability of the health system to contain COVID-19 by ramping up implementation of urgently needed practices we failed to do for the last two months.  

Now let me discuss the rice situation, as it is the staple food of our people.

The IATF, speaking through Cabinet Sec. Karlo Nograles, recently announced that we will import 300,000 metric tons equivalent to about nine days of the country’s normal consumption level  to augment our rice inventory.

That rice inventory is good for 75 days (pre-lockdown), of which 60 days is in the hands of the private sector, whether commercial traders or households, and 15 days inside NFA warehouses.  With the lockdown’s emergency measures, foremost of which is the immediate distribution of food to the marginal sectors, those 15-day stocks are fast depleting.

The DA and NFA proposed this immediate emergency action, but as of this writing, it is yet to be approved by our economic managers, which will have to consider how this squares off with the one-year-old Rice Tarrification Law and its implementing rules.  The NFA is nothing more than a public warehouse agency; maybe the PITC, created under martial law for barter trade and since given authority to trade with money, could be utilized for the purpose. 

The problem is compounded by the recent suspension of export trading by Vietnam, our largest supplier of imported rice.  In an article on this space last March 2 entitled “Havoc,” I wrote about the tightening of world supplies of rice, with China’s under-production due to Wuhan’s woes (20 percent of China’s total production), Pakistan and India’s locust infestation, along with lockdowns as well, and  with Vietnam  and Thailand intending to cut their export volumes. 

Government need not have gone public with the need to import.  In rice trading, silence is golden.  Under present dire circumstances, it would have been better if we quietly negotiated with our Asean suppliers to secure our needed rice shortfall.  By announcing what has yet to be implemented, we risk a scramble for supplies from similarly situated shortfall countries, competing for a thin marketable volume of 6 percent of the world’s total production of rice.

The USDA upped the ante, by predicting that we will need to import 3.3 million metric tons this year, a 14-percent increase from last year’s massive imports which our farmers decried and continue to decry. (Take note: even our rice-producing provinces are on lockdown mode).  

Expectedly, the farm sector, speaking through the Federation of Free Farmers national manager Raul Montemayor, an expert on the economics of rice, is raising a howl. “ They should have kept this plan under wraps for now. DA is asking farmers to plant, plant, plant, but at the same time they are already thinking of importing,” rued Montemayor.  

But then again, food security is essential, whether in normal times, or in times such as these, when calamity sees no light at end.

But if the commercial sector has ample supply, and its inventory of lower-grade rice not moving due to quarantine restrictions, plus free NFA rice supplanting part of their usual market, an intermediate measure could probably be undertaken by government.

Part of the 2019 privately-imported rice stocks could be taken by government, given the public emergency,  compensated at landed cost with the 35-percent tariff reimbursed as well, or applied as tax credit for the next round of private-sector imports. 300,000 metric tons, assuming the cited figure is correct, should amount to at most P8.3 billion at current exchange rates.  The other assumption of course is that the import cost declaration is correct.

This practice could in fact be replicated in future exigencies, with NFA providing free warehousing and the DOF waiving the tariff for every metric ton withdrawn by the NFA from privately-owned stock.  This way, no public funds are used for rice imports, and whatever NFA gets by way of budget subsidy is devoted to buying palay from our farmers at competitive prices. 

 Once again, we repeat the mantra, that “food security is national security.”