Rice crisis increasing poverty, puts MDG target out of reach

The ongoing rice crisis will push many more Filipino families into poverty and prevent the country from achieving the Millennium Development Goal to cut extreme poverty and hunger by 2015, according to NGOs.

"We are definitely not going to meet MDG1 [the eradication of extreme poverty and hunger]," says Joel Saracho, national coordinator of the Global Call to Action against Poverty (GCAP-Philippines). "There is going be a further delay in achieving it by 2015."

Saracho predicted that the rice crisis would continue for some time, putting more pressure on Philippine food security and self-sufficiency and hitting the poor hardest.

Average prices of rice have risen P10 to P15/kg (23 to 34 cents) since the rice shortage hit three months ago. What used to cost P25 to P30 (58 to 69 cents) now goes for P35-P45 (81 cents to $1.04) in Manila stores. In Mindanao, rice is sold at P45-P51/kg (95 cents to $1.18).

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Arze Glipo, lead convenor of Asia Pacific Network for Food Sovereignty, a group of farmers' organisations and NGOs, said the spike in rice prices would likely push many families further into poverty. "Rice is our staple food and food accounts for 60 percent of a family's [expenditure]. At the rate rice prices are increasing, many families will find themselves further along the poverty line," Glipo told IRIN.

The Philippines' MDG target is to cut the proportion of people living in extreme poverty and subsistence from 24.3 percent in 1991 to 14.6 percent in 2006 and 12.5 percent in 2015.

A mid-term report prepared by the National Economic Development Authority last year showed that compared with the 1991 baseline figure, the Philippines had bettered its mid-term target on extreme poverty to 13.5 percent in 2003, but in recent years the percentage has been increasing again.

In just three years, from 2003 to 2006, the number of poor Filipinos rose to 27.6 million from 23.8 million, according to the GCAP, an increase of 3.8 million. This translates to about 4.7 million families earning less than P6,274 ($146) a month. In Metro Manila, the poverty threshold is higher at P8,569 ($199) a month.

Inflation pressure

April 2008 inflation was up to 8.3 percent from 6.4 percent in March, based on figures released by the National Statistics Office, because of the hike in rice prices. April's figure is the highest monthly rate in two years.

Latest figures from the NSO showed that May 2008 inflation has further risen to a nine-year high of 9.6 percent. The highest inflation rate was recorded in January 1999 at 10.5 percent.

Photo: Veejay Vilafranca/IRIN
High prices and shortages of rice and other food stuffs are affecting vulnerable communities the most, particularly children

Saracho said inflation would exert further pressure on poor people. "Their income is barely enough for their daily needs yet there is a decrease in their purchasing power."

In Metro Manila, for instance, the spiralling prices of food have pushed the poverty threshold to P10,000 ($232.5) a month for a family of five, government statistics showed.

National Statistical Coordination Board (NSCB) director-general Romulo Virola warned last week that unless prices are capped, more families would slip below the poverty line.

Virola said the P10,000 threshold "only covers basic necessities such as food, education, health, transportation".

With the increase in the cost of living, the NSCB estimates that the number of poor families could swell to 259,135 in Metro Manila alone in 2008 from 167,316 in 2006.

The new estimate, however, is preliminary, as the official figure will be determined in 2009. Poverty surveys are conducted once every three years, and the last set of statistics on the poor was compiled in 2006.

Mindanao worst hit

Valerie Guarneri, World Food Programme (WFP) director for the Philippines, told IRIN that Mindanao was expected to be hardest hit by higher food prices, particularly in the Autonomous Region in Muslim Mindanao (ARMM) and its outlying provinces.

Before the food crisis, the poverty level there had barely dipped from 50 percent of the population to 45 percent. "This is nowhere near the target of 25 percent by 2015."

Photo: Google Maps
A map of the Philippines and surrounding countries highlighting Mindanao island

"Even more disturbing," Guarneri said, "is the fact that the proportion of the population that fails to meet daily food needs has increased from 62 percent to 64 percent."

Prevalence of malnutrition (defined in this case as being dangerously thin or too short - stunting - for one's age and or being deficient in vitamins and minerals) among children in the ARMM had also increased - from 31 percent in 1990 to 38 percent in 2005, based on a survey by the Food and Nutrition Research Institute that was only released in 2007. The figure of 38 percent malnourished would have to drop to 15.65 percent by 2015 to meet the MDG1 goal – an all but impossible task.

The government has responded with stop-gap measures to mitigate the effects of the rice crisis, such as issuing food coupons in exchange for rice, but Glipo said the problem was the lack of domestic support for agriculture and agricultural development.