Today's quiz: Which is more accurate, the first article or the second?
The first article is from the BBC:
The Philippines has always had to import rice. Unlike neighbours Thailand and Vietnam, which have turned themselves into the world's two biggest rice exporters, successive governments in the Philippines have failed to invest in the agricultural sector.
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The second article is:
The Philippines used to be self-sufficient in rice and other agricultural product.
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Now, two completely different takes on the matter! Which would be more correct?
Here's some research that I found:
BAS statistics from 1980 to 2003 shows that rice production has been growing at an average of 3.05% while rice consumption has been growing at an average of 3.00%. Rice consumption averages 105 kilograms per capita in 2003. On the other hand, the trend in the country’s rice production and importation in the past nine years shows an increasing dependence on rice imports. Chart 1 shows an increasing volume ofrice importation from zero to more than 2 million metric tons of rice from 1980 to 1998. Importation to apparent consumption ratio has increased from 1.51% average in the 1991-1995 period to 14.9% in the 1996-2000 period and stabilized at 11.6% in the 2001-2003 period. (See Table 2 and 3).
Rice stocks inventory from 2001 to 2003 show that total supply exceeds total demand by more than 2 million metric tons while more than 800,000 metric tons of rice inventory each year were either wasted or converted to feeds. (SeeTable 4).
Domestic rice remains very uncompetitive compared to cheap imported rice from leading rice exporters. The price trend shown in Chart 2 shows that world price of rice has consistently remained at half of the domestic price. In 2003, the world price of rice ranged from US$0.18 to US$0.20 per kilogram, which is equivalent to only 9.76 and 10.84 pesos, respectively. Meanwhile, domestic wholesale price of rice averaged 18.30 pesos while retail price averaged at 22 pesos in 2003. These figures indicate that if rice trade inthe country is fully liberalized, imported rice would flood the market displacing domestic rice.
One strategic effect of free trade in the country is the country’s increasing dependence on food imports. Aside from rice, other strategic crops such as corn, onion, garlic and a variety of vegetables have been badly affected by the influx of cheap imported commodities .
Free trade does not make a commodity competitive. Technically, the Philippines has a higher productivity per hectare compared to Thailand, but still, Thai rice has a comparative advantage because it costs less to produce rice in that country. The Thai government provides agricultural assistance in production, infrastructure and marketing in order to make its rice cheaper. Another comparison is to the US rice which costs higher to produce than our domestic rice but the US exports rice at a lower price under its food aid program. In the case of the US, it is subsidizing production and exportation of rice. In contrast, Filipino rice farmers continuously face problems of rising production costs while they receive very little assistance from the government. What put Thai and US rice at a comparative advantage is their policy that supports rice producers and makes production and marketing cost lower.
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I thought it was interesting the different takes on the issue.