The Development of a Crisis

by E. BERONIO | PNFSP

A rice crisis in 1971 became President Ferdinand Marcos’ opportunity to implement the Green Revolution through the Masagana 99 program. Masagana 99 laid the groundwork for the Philippines’ dependency on transnational corporations for seeds, fertilizers, and technology. When the International Monetary Fund imposed belt-tightening measures in the early 1980s, the program was shut down. By then, agriculture had become capital-intensive in a country where the majority of farmers were poor and landless.

The economy went through structural adjustments to gain credit from lending agencies.
At the behest of  these agencies, the government instituted financial and trade reforms. It allowed the reduction of agricultural tariff from 50 percent to around 28 percent. Non-tariff import barriers were also removed. Agricultural production subsidies were cut. 

In 1983, another rice crisis erupted. Crowds trooped into the National Food Authority (NFA)’s KADIWA stores for government-subsidized rice. Inflation leached the real value of wages. Nonetheless, the NFA’s budget allocation was reduced, limiting the agency’s capacity to buy rice for selling to the public at affordable prices. In 1985, the government removed the rice price ceiling.

The wheels of rice production were slowing down. The days of intensive farming was over. Since it focused on export industries that brought in the dollars, the government neglected rice production. Farmers had become reliant on inputs whose prices went up each year. When they could not afford seeds and fertilizers, they stopped farming. The chemicals were also taking its toll on the soil.

By the mid-1980s, the Philippines, once a top exporter, had stopped selling rice in the world market. Instead it began importing to augment dwindling stocks. From not importing anything from 1978 to 1983, the NFA imported around 540,000 metric tons of rice in 1985. By 1998, it was importing 2.125 million metric tons.  Retail prices doubled again in 1995, the year the Philippines joined the WTO and submitted itself to trade liberalization agreements. This year, the government is expecting to break its record by buying 2.4 million metric tons from countries such as Vietnam and Thailand at prices ranging from 800USD to 1,000USD per metric ton.

Through destructive modernization and liberalization, the country can no longer produce food that is affordable to its people.

Read this and other articles in Ani's special issue (Ani Vol. 1 No. 2, 2008). Click here to download.