GLOBALIZATION, PROFITEERING, LACK OF GENUINE AGRARIAN REFORM BEHIND WORSENING FOOD CRISIS

Civil society groups call October 16 ‘World Foodless Day’

As the world celebrates World Food Day today, research group IBON join civil society groups worldwide in denouncing globalization polices and corporate profiteering, which have made food a commodity for trade and speculation that worsened global hunger.

Global food prices have risen by 75% since 2000, according to the World Bank, while prices of rice, corn, wheat, and soybean have hit all-time highs. Prices of meat, poultry, eggs and dairy products naturally follow the upward trends of grains prices. Amid the global financial crisis, increased speculation in food and fuel prices is seen as a possible consequence that will further push food prices up and worsen the poor’s access to food.

The world is facing its worst food crisis that has been aggravated by trade liberalization policies imposed by international finance institutions (IFIs) like the International Monetary Fund and trade bodies such as the World Trade Organization. These policies have allowed intensified profiteering by food transnational corporations (TNCs). In fact while more and more people go hungry everyday, TNCs such as Cargill and grain traders such as Archer Daniels Midland reported increased profits as of the first quarter of 2008.

TNCs in its desire for more profits have continued to lobby IFIs and Third World government to implement globalization policies in food and agriculture, including liberalization of trade and investment in agriculture, privatization of public organs in agricultural extension services such as irrigation, trading and the like, and deregulation of government roles in pricing, marketing and even land reforms. These globalization policies compound the deep crisis of agriculture and food production in underdeveloped countries due to decades-old landlessness of farmers, backwardness of their tools and production, monopoly of land, tools and inputs, TNC control in production and trade, and government neglect. Thus, ironically, hunger is at its worst in rural communities in the Third World where most food and agricultural production take place.

Globalization has not only resulted in the increasing bankruptcy and worsening poverty and hunger of farmers and consumers, but also in continuously eroding local production and self-sufficiency of Third World countries.

Civil society, peasant groups, and people’s organizations around the world consider World Food Day an opportune time to send a strong message that farmers and people of the Third World reject globalization, trade liberalization, and TNC profiteering of agriculture. It is also a time to recognize the successful efforts of broad alliances of farmers and people’s organizations for strengthened protests against globalization, struggle against genuine agrarian reform, and relentlessly demand for social accountability. (end)

World Foodless Day events are being held in more than fourteen countries across Asia and being supported by civil society groups around the globe. For more details on the events of World Foodless Day, visit http://www.panap.net/wfd



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LEAVE IT AND SAVE RP SOVEREIGNTY, SENATORS URGED ON JPEPA

As Sen. Miriam Santiago advises opposition senators to “love or leave” the Japan-Philippines Economic Partnership Agreement (JPEPA), research group IBON Foundation urges the Senate to choose the non-ratification of the deal and help reclaim the country’s economic sovereignty.

Even as Santiago warned senators that renegotiating the treaty would mean wasting one year’s worth of Senate time and resources, IBON said that the long-term consequences of lost policy sovereignty are severe and will cement Philippine backwardness.

The group added that the non-ratification of the Japan-Philippines Economic Partnership Agreement (JPEPA) will send the signal that the country is after trade and investment cooperation that is of mutual benefit and will reject deals that are unequal and destructive. It is more advantageous for the country to have less investment at better terms rather than more investment but foregoing the most important benefits.

Rejecting JPEPA also challenges the Japanese government to prove that its official development assistance(ODA) is given to support development as Filipinos see it and not to influence domestic economic policy-making to serve Japanese corporate interests.

Even with the exchange of notes between the Japanese and Philippine governments, the JPEPA signed by the Arroyo administration remains unequal and defeatist. The Philippine Senate can be at the forefront of rejecting this destructive deal and take the first step in upholding economic sovereignty and national development, the think-tank said. (end)

IBON is a convenor of No Deal! Movement Against Unequal Economic Agreements.

7 OUT OF 10 FILIPINOS CAN’T BUY ENOUGH FOOD, HAVE TROUBLE PAYING ELECTRICITY BILLS, BASIC COSTS

More Filipinos have trouble buying enough food and paying for basic expenses, according to the latest IBON nationwide survey.

Of the 1,495 respondents, 75.3% said that their family had a problem buying enough food, a substantial increase from 63.2% last January, while 69.7% had trouble paying for electricity and water bills.

The survey also showed that 67.42% of respondents have difficulty paying for transportation costs, compared to 60.6% in January; 73.4% had a problem buying their medicines or paying for their medical treatment; and 68.2% had trouble paying for their children’s tuition.

The April 2008 IBON Survey was conducted from April 7 to 16 across various sectors and regions nationwide with a margin of error of plus or minus three percent (end).

Below is the tabulation of results of respondents’ problems meeting basic expenses.

In the past three (3) months, has your family had a problem meeting the following expenses?

January 2008

April 2008

Frequency

Percentage

Frequency

Percentage

Buying enough food

950

63.21

1,126

75.32

Paying for children’s schooling

997

66.33

1,020

68.23

Paying for transportation

911

60.61

1,008

67.42

Paying for water and/or electricity

1,006

66.93

1,042

69.70

Buying medicines/paying for medical treatment

1,024

68.13

1,097

73.38

THINK-TANK SLAMS PROPOSAL TO CUT RICE TARIFF

Importation not a solution but the reason behind worsening rice crisis

The bid to lower rice tariffs to bring in more importation is a problematic proposal since the country’s growing dependence on rice imports is precisely the reason behind the worsening rice crisis.

In reaction to the proposal made at the government’s Food Summit to reduce tariffs to as low as 12%, independent think-tank IBON Foundation says that rice importation has not resulted in lowered rice prices, but worsened the bankruptcy of farmers and even placed the country to greater food insecurity.

The group added that rice tariff cuts will allow higher profit margins for private traders and will only give them further control of rice prices and ultimate monopoly in the distribution of rice.

Instead of cutting tariffs and allowing more importation, government should do the opposite: re-impose regulatory mechanisms on food supply that were removed by liberalization and provide enough subsidies and other support services for rice farmers.

IBON stresses the need to resist impositions made by international creditors like the World Bank and the Asian Development Bank to bring down rice tariffs and increase food importation..

Government should also immediately increase NFA’s  palay procurement from its dismal 5-year average of 0.05% of the total palay production to effectively influence the market. This will directly benefit local farmers, and will help NFA address the issue of hoarding by rice cartels.

AS GOV’T HOLDS FOOD SUMMIT : REVERSE RP’S DEPENDENCE ON FOOD IMPORTS, THINK-TANK URGES

The Philippines has become too dependent on food importation to make up for its shortfalls in domestic production and should reverse this trend, says independent think-tank IBON Foundation as the Department of Agriculture opens its Food Summit today.

“Importation should only be a short-term solution to supply shortages, “ said IBON executive editor Rosario Bella Guzman.

“In the long-term the government must make the country self-sufficient in the production of its staple foods such as rice, not just to guarantee that Filipinos have enough to eat without relying on foreign markets, but also to ensure sustainable development.”

According to data from the Bureau of Agricultural Statistics, the country imported 808,000 metric tons (MT) of rice in 2001, or 10% of total rice disposable of 8.1 million MT. By 2006, imports had grown to 1.7 million MT or 17% of total rice disposable of 10.3 million MT.

As the Department of Agriculture made a positive step of raising the buying price of palay to P17 per kilogram from P12, it should ensure that traders do not translate this to unreasonably higher prices of commercial rice.

Government should also allocate more funds for buying from local farmers, said Guzman. If the P5 billion announced by Pres. Arroyo were used, it would only buy some 300,000 MT– less than one percent of the expected production this year of 7.2 million MT of palay.

If the estimated P62 billion that would be used this year for imports were allocated for local procurement, the NFA could purchase from farmers 3.6 million MT of palay. Aside from benefiting local farmers, this would also help NFA address the issue of hoarding by unscrupulous rice traders.

“The Food Summit should focus on such urgent measures that will help improve our local producers,” said Guzman. “The country’s experience since the 1990s clearly shows that importation has only terribly worsened the country’s self-sufficiency in food.”

ACROSS-THE-BOARD WAGE HIKE URGENT, DOABLE –IBON

A legislated across-the-board wage hike, and not regional wage board hikes or non-wage benefits, should be urgently granted to give Filipino workers immediate relief from rising cost of living. And, contrary to claims of employers, such increase is doable.

The increasing labor productivity of local workers, or the ratio of national output to employment, has been steadily increasing over the past decade. IBON research head Sonny Africa pointed out that between 1999 and 2006, labor productivity has increased by 56.3% in nominal terms and 13.1% in real terms (taking inflation into account). This shows that employers could afford to grant the P125 wage hike, which would necessarily trim their profit margin but will certainly not push them to bankruptcy.

He added that such a wage hike is actually not enough to raise minimum wages to the level of decent living, but would at least provide relief for the workers. The current daily minimum wage in Metro Manila is P365, which would become P490 with the proposed wage hike, or only half of the estimated daily living wage as of March 2008 of P858.

Africa said that the wage hike must be legislated and across-the-board since all workers nationwide are affected by the skyrocketing prices of goods and services. He pointed out the regional wage boards have only served to confuse parallel conditions of workers across regions.

Further, a legislated wage hike would have the strength of law behind it and is more enforceable while allowing for fewer exemptions.

PROPOSAL TO CUT NFA POWERS HIT:RICE IMPORTS DON’T SPELL CHEAPER PRICES; GOV’T URGED TO STRENGTHEN LOCAL RICE SECTOR INSTEAD

As government continues to turn to importation as remedy for the current rice crisis, this time with the proposal to further cut the powers of NFA and increase private importation, research group IBON reminds the administration that rice imports, based on experience, do not result in lower-priced rice.

Decades of importation has proven that imported rice are not sold at cheaper prices because private importers have the monopoly over pricing and trading, while government has withdrawn support for marketing and distribution. The NFA’s reduced role in palay procurement and rice trading, including setting price ceilings left farmers and consumers at the mercy of traders. Data shows that the monopoly of the rice market is increasing, with only 2,968 rice dealers and wholesalers as of 2006 compared to 21,000 in 1986. Meanwhile, NFA procurement is only at 0.5% and distribution rate is only 6% of total production.

Prices are even likely to be driven up by the recent decision to remove the 300,000 metric ton quota on private sector rice imports because it paves the way for profiteering. The government says that the NFA will remain the “importer on record” so private sector importers will not have to pay the current 50% tariff and will instead just be charged a P2-3 “importation service fee” which, the agriculture secretary was quoted as saying, “(reduces) the tariff to about around maybe 10%”. The NFA will also supposedly determine import volumes.

Under this scheme, rice bought abroad at US$700 per ton could be sold at as much as P35.40 per kilo or higher – broken down into P29.40 import cost (at an exchange rate of P42 per US$1), P3 NFA import fee, P3 storage and distribution cost. This amount does not yet include traders’ mark-up. If rice is bought abroad at US$1,000 then its domesti c p rice could rise to as much as P48 per kilo or higher with traders’ mark up.

The worst hit are the poorest four-fifths of Filipinos trying to live off P110 or much less each day and for whom food takes up half to over two-thirds of their expenses. As it is they have already seen their real incomes fall by 5%-13% in the period 2000-2006. Majority of these number are the rice farmers who are pushed more into bankruptcy with the flooding of imported rice in the market amid sufficient local production of palay.

If we are to ever going to get out of this crisis, the government should in the short term, start expanding land area planted to rice, increase the NFA’s local rice procurement to 25% to 30% so it can effectively influence rice prices in the market, provide sufficient production and price subsidies to farmers, and rescind its commitments to further liberalize agriculture