In its June 2020 Briefs, the Asian Development Bank (ADB) reported that vulnerable groups in the Asia-Pacific (AsPac) region are at risk of malnutrition and hunger. Export restrictions, lockdowns, and closures at the boarders have disrupted the supply and demand for food during the pandemic. Written by Kijin Kim, Sunae Kim, and Cyn-Young Park, the ADB Brief estimated that about 70% of total employment in the AsPac, which consists mainly of informal workers, was at a higher risk as disruptions generated household income declines and livelihood loss.
Basic commodities, such as rice, are showing that its retail prices increased by about 20% in countries like Thailand (i.e. a major tice producer and exporter) and its neighbor – the Lao People’s Democratic Republic. This was observed from January to April this year compared to the same period last year. Supply disruptions, panic buying, and a bit of weather disturbances drove retail process higher. In other countries such as India, Mongolia, Pakistan, and Sri Lanka, rice retail prices rose within a range of 10% to 20%. A snapshot of the weekly prevailing retail prices of well-milled rice in the Philippines from January 2020 until mid-July 2020 is presented below. Expressed in terms of pesos per kilogram, price increases were observed.
Writing for the International Rice Research Institute (IRRI), Jean Balié and Harold G. Valera mentioned that global rice stocks are higher compared to the years 2008 and 2011. China and India are among the world’s largest rice consumers, and their rice stocks are sufficient to cover several months of consumption. This is a good short run scenario. Using the IRRI Global Rice Model (IGRM), for example, the potential impacts in the medium term of countries banning rice exports like Vietnam ((i.e. the third-largest rice exporter after India and Thailand), and Cambodia could trigger spikes in rice prices by at least 19% or about US$84/ metric ton. From March 24 to April 30, 2020, Vietnam imposed export bans on rice. Cambodia followed this trade restriction on March 18 to April 30, 2020.
Meanwhile, the Department of Agriculture in the Philippines launched last August 20, 2020, a project called “BANTAY PRESYO” or “PRICE WATCH” of the retail prices of rice and other food items (e.g. fruits and vegetables, meats, fish, spices, sugar, cooking oil) in Metropolitan Manila. Retail prices are monitored daily from Monday to Friday by the Agribusiness and Marketing Assistance Service – Surveillance, Monitoring, and Enforcement Group. Initial results for the retail price per kilogram of well-milled rice showed the following:
It can be observed that retail prices of well-milled rice were stable since the project was launched. However, the prevailing retail price and highest retail price recorded in the public markets showed that local rice tends to be more expensive than the imported ones.
Prices of imported rice, however, can increase if other countries will pursue export or temporary trade restrictions. These trade restrictions are aimed at ensuring stable domestic food supply during a crisis. Furthermore, declines in agricultural labor availability (especially in countries with low levels of mechanization), disruptions in transport and distribution networks, and capital inflow shortages in farming can further push prices higher. In 2011, the ASEAN Plus Three Emergency Rice Reserve (APTERR) was established as a permanent regional cooperation mechanism that is designed to “strengthen food security, poverty alleviation, and malnourishment eradication without distorting normal trade among its member economies”. It is estimated that APTERR has stockpiled at least 700,000 metric tons of rice as emergency reserves.
In a fairly recent study published online last July entitled, “Resilience of Local Food Systems and Links to Food Security – A Review of Some Important Concepts in the Context of COVID-19 and Other Shocks“ by Christophe Béné, it was observed that “most of the impacts of the COVID-19 have been until now (June 2020) mainly around the access dimension of people’s food security”. Access is one of the 4 dimensions of food security. The others are availability, quality, and stability. Access is described by the U.N. Food and Agriculture Organization as having “adequate resources to obtain appropriate food”. How have individuals and their households able to bounce back instead of engaging in detrimental coping strategies? Would having a higher sense of self-efficacy work? Scholars like Prof. A. Bandura who specialized in social cognitive theory, defined self-efficacy as “an individual’s confidence in their ability to plan and follow through with a series of actions that will result in desired outcomes or achievements”.
Listed as the third most disaster-prone country in the world by the International Labor Organization, businesses in the Philippines had pursued emergency employment schemes, and the government resorted to cash transfer mechanisms as short-term initiatives to address livelihood loss. It recently availed of the ADB’s Rapid Emergency Supplies Provision Project that provided food installments to support the most vulnerable households affected by the pandemic. A more sustainable approach would be the provision of opportunities to learn new skills via flexible learning options. ░░
Louie A. Divinagracia