Former President Gloria Macapagal Arroyo has shared her insights and experiences on how her administration dealt with the global rice shortage that hit the world in 2007 and 2008.
In a recent speech in Indonesia, Arroyo praised the efforts of her former Agriculture Secretary Arthur C. Yap, who was the former governor of Bohol and a three-termer congressman, for implementing effective measures to stabilize the rice supply and price in the country.
Arroyo spoke at the first-ever Golkar Institute (GI) Presidential Lecture Series in Jakarta, Indonesia on September 16, 2023. She was invited as the guest speaker for the event, which focused on leadership and resilience in the ASEAN region.
Arroyo recalled that in 2007 and 2008, several major rice exporters such as Vietnam and India restricted or banned their rice exports due to domestic concerns and market pressures.
This led to a global rice crisis, as the demand for rice exceeded the supply.
The price of rice soared to over $1,000 per ton in April 2008, along with other commodities such as fuel, corn and wheat.
Arroyo said that despite having the highest rice harvest in the decade, thanks to the hybrid varieties developed with her government’s funding, the Philippines was still affected by the global price surge and speculative hoarding.
To address this situation, Yap imported rice from other countries, partly through government-to-government contracts by the National Food Authority or NFA, the former president said.
Arroyo said the Philippines was able to secure a good deal from Vietnam, owing to their good relationship and mutual trade interests.
The Philippines eventually procured a record 2.3 million tons of rice, and the NFA released affordable rice to the market, she revealed.
Arroyo said that Yap refused to delay releasing NFA rice until the traders could dispose of their stocks.
Instead, he (Yap) flooded the stores with cheap rice, leaving hoarders with big losses, Arroyo said.
Arroyo, a former professor of economics, said that one lesson that can be learned from the 2008 rice crisis is that the government should have ample market clout to defeat and deter speculators.
She said speculators will always try to profit from holding on to stocks, which drives up prices and future gains.
She stressed that the government should keep ample stocks all the time, rather than rushing to import when prices shoot up.
She also said that there will always be recurring and unexpected developments that affect prices, such as weather patterns and market swings.
Arroyo added that weather patterns affect harvests; they can change, and extreme events cause temporary shortages.
She also pointed out that market swings can be caused by various factors, such as the use of corn for ethanol production in 2008.
Arroyo concluded her speech by saying that she hopes that her experience can help inform and guide future policy makers and stakeholders in ensuring food security and resilience in the country.