VARIOUS rice and agriculture industry groups have urged the Department of Agriculture (DA) to be “more transparent” on the real score of the country’s current rice supply situation as data provided by the department indicated apparent discrepancies.
Federation of Free Farmers National Manager Raul Q. Montemayor said the DA’s recent pronouncement that the country’s current rice inventory of 2.7 million metric tons (MMT), equivalent to 82 days of consumption, is somehow misleading.
Montemayor explained that the 2.7 MMT stock level is sufficient only to last for about 76 days at a 35,369.57 MT daily nationwide consumption rate—this, based on a per-capita consumption of 118.81 kilograms and a population of 108.66 million, which the DA uses in its projections.
Furthermore, Montemayor said their estimates show that supply stocks at the start of July 1 may be at 2.4 MMT, which is a tight volume to consider since it is only good for 68 days of consumption.
Montemayor explained how they arrived at the 2.4 MMT volume: with an 8.2 MMT estimated palay production in the first semester, combined with the 2.675 MMT beginning inventory and 1.5 MMT rice imports to date, less the estimated total utilization of 7.13 MMT.
Montemayor questioned the DA for seemingly changing, from time to time, the per-capita consumption they use in their supply projections and current supply stock estimate.
“We urge the DA to be more transparent in how they arrive at their inventory estimates. For example, they should divulge their estimates of local palay production and the per-capita rice consumption figure that they use,” he told the BusinessMirror.
“They should also explain why their stock estimates keep on changing every time they make an announcement,” he added.
Asked by the BusinessMirror, the DA said the bulk of the 2.7 MMT current rice supply is held by households and commercial warehouses, without divulging exact figures of each segment.
The BusinessMirror also sought comments from the National Food Authority (NFA) on their current buffer stock level but they did not respond as of press time.
Rice Watch and Action Network Executive Director Hazel Tanchuling said the government needs to divulge the real volume of rice being held by the NFA in light of Pagasa’s forecast that at about 10 to 17 tropical cyclones will enter the country this year.
NFA stocks are now solely used for buffer stocking during calamities following the implementation of the rice trade liberalization law last year.
“It is very hard to rely on the goodness of the hearts of traders to offer cheap rice in a disaster situation. It should be NFA. And because we do not know their stock level and with the foiled importation by the Philippine International Trading Corp., it is possible that the government has less than the mandated 30-day stock level,” Tanchuling told the BusinessMirror.
Discrepancies
BASED on the data obtained by the BusinessMirror, the DA projects total rice supply demand this year at 14.536 MMT, about 12.91 MMT of which are for food consumption.
The DA arrived with the 12.91 MMT rice demand for food consumption using a 108.66 million population multiplied by a 118.81 kilogram per capita consumption based on Philippine Statistics Authority (PSA) data.
The BusinessMirror learned that the 118.81 per kilogram per capita figure used by the DA is based on the PSA’s supply and utilization account (SUA) figures, a data set that some pundits have questioned to be unreliable in estimating food demand.
The SUA uses the so-called disappearance method which treats rice consumption as merely residual after computing rice stocks and removing exports and waste, among others.
Nonetheless, using DA’s own figures, a BusinessMirror analysis indicated that indeed, the 2.7 MMT current stock is only equivalent to 76 days and not 82 days.
The 2.7 MMT would be equivalent to 82 days of consumption if the daily consumption rate is lowered to 32,926.83 MT, which would mean a lower per capita consumption of 110.6 kilograms, BusinessMirror analysis showed.
Based on official food consumption survey (FCS) data of the PSA, the country’s rice per capita consumption as of 2015-2016 is nearly 110 kilograms.
In 2018, the BusinessMirror published a long-form article explaining how the government uses two sets of data that can result in data discrepancies that make rice demand and supply difficult to evaluate.
A mere 1-kilogram reduction in the estimated per capita rice consumption of Filipinos is already equivalent to 108.66 million kilograms or 108,660 metric tons.
Government officials admitted to the BusinessMirror that they indeed face discrepancies in using the FCS data and the SUA figures in evaluating the country’s rice supply and harmonizing the two data sets is close to, if not totally, impossible. (Read the BusinessMirror’s award-winning BroaderLook special report: https://businessmirror.com.ph/2018/08/30/snapshot-of-rice-consumption-data-remains-grainy-as-pinoys-grapple-with-supply-prices/)
Philippine Chamber of Agriculture and Food Inc. (Pcafi) President Danilo V. Fausto said the government should establish a sound data system so it does not resort to “guesstimates” that may put the country’s supply in jeopardy.
“We ask the DA to review their estimates based on actual data. We run the risk of having a shortage of rice if we do not have reliable data that could cause prices to spike,” Fausto told the BusinessMirror.
“A difference of 3 kilograms in per-capita consumption computations for example is huge. That is already equivalent to 300,000 metric tons which is what the PITC wanted to import earlier,” Fausto added.