Subsistence

The inflation rate for March was higher than expected. This will have consequences for reduction of interest rates we need to spur economic activity.

Rep. Joey Salceda notes that the slight increase in the inflation rate is all about rice. Surging prices for the staple cereal fuels inflation in our economy. As a result, while our growth rate may be higher than most in the region, our inflation rate will continue to be among the highest as well.

Without the abnormally high prices for rice, Salceda estimates that our inflation rate would be at a more tolerable 3.1 percent. For March, food inflation accounted for 57 percent of total inflation.

Continuing high food inflation is the principal reason for the declining approval rates of the President. President Marcos understood this well. This is the reason he held the agriculture portfolio concurrently for over a year. This, however, did not produce anything dramatic by way of improving our agricultural productivity.

Rice is our most politically sensitive agricultural commodity. This is the reason why, over the years, government evolved numerous programs delivering state support for our rice farmers. All these programs notwithstanding, the country has gradually climbed to the status of the world’s biggest rice importer.

This year, Agriculture Secretary Laurel has ramped up government support for our rice farmers. A total of P12 billion in financial assistance to our rice farmers is set to be distributed by June, in time for the onset of the planting season. Government is also distributing farm machinery to farmers.

Despite the volume of subsidies extended to our rice production, the price of the commodity continues to climb. The El Niño weather phenomenon adds to our woes. Nearly all our major agricultural regions are currently suffering from drought.

Even as most of our arable land, irrigation systems and warehousing support are devoted to support rice production, the price of the commodity continues to rise. We need a radical reconfiguration of how we support rice productivity.

Our rice production is immune to all the subsidies and credit programs organized by government. It will continue to be inefficient unless