Submit Your Entries

Print Entry
TV Entry
Photo Entry
Radio Entry
Online Entry

2018 Snapshot of rice-consumption data remains grainy as Pinoys grapple with supply, prices

 

 

BEST AGRICULTURE NEWS STORY-NATIONAL

SNAPSHOT OF RICE-CONSUMPTION DATA REMAINS GRAINY AS PINOYS GRAPPLE WITH SUPPLY, PRICES

JASPER EMMANUEL ARCALAS AND CAI ORDINARIO

View Article Reference

 

Snapshot of rice-consumption data remains grainy as Pinoys grapple with supply, prices

AS Filipinos’ appetite for rice becomes as big as its political-economic implication, a snapshot of data on its consumption remains grainy.

This is so because the government uses two data sets to estimate the amount of rice consumed by every Filipino. Having two data sets to compute for a single amount can result in data discrepancies that make rice demand and supply difficult to evaluate.

The Philippine Statistics Authority (PSA) releases the Supply Utilization Accounts (SUA) of selected agricultural commodities and the results of the Food Consumption Survey (FCS).

According to PSA Assistant National Statistician Vivian R. Ilarina, the SUA is based on production while the FCS is based on a survey that doesn’t separate the consumption of rice from other “cereals.”

The SUA treats rice consumption as merely residual after computing rice stocks and removing exports and waste, among others.

“You estimate first the stocks plus the stocks available at the beginning of the year plus the local production plus imports—some of that—less use and disposition like exports, waste, processing, feeds, seeds—everything—then you have the closing stock, which [also comes] from the survey of the PSA,” Ilarina said.

“When you compare the left side equation to the right side, there is a residual. And this represents now the total consumption, which is available for food. This is not yet considered actual food consumption. In the survey of food demand, that is actual consumption,” she added.

Evaluating actual consumption is important as some sectors are pushing for unbridled entry of rice into the system while its price is being marked by runaway increases and a possible phantom shortage.

Ingrained

RICH and poor households always have rice included in their budgets. It is the cheapest source of carbohydrates and is most compatible with Filipino dishes.

Based on interviews conducted by the BusinessMirror, a low-income family consumes three to four kilos of rice per week—around 12 kilos to 16 kilos per month—relative to the number of members and their appetite.

Due to the recent increase in rice prices, households shell out more pesos to pay for goods. This is especially true for lower-income households, especially those at the bottom of the pyramid.

University of the Philippines School of Statistics Dean Dennis S. Mapa said food items, including rice, account for 70 percent of the household budget of Filipinos earning less than average. About 39 percent of an average Filipino household’s budget is for food items.

This makes the poor even more sensitive to increases in food prices, including rice, Mapa explained.

Of course, we are affected by high rice prices, Reynaldo Teñuso, a resident of Malolos, Bulacan, told the BusinessMirror. Teñuso added this becomes even more felt  when the price of a kilo of rice increases P1 or P2 more.

To save on costs associated with cooking at home, some households resort to buying cooked rice, usually at P10 per cup, from a store.

For three meals a day, this means P30 ($0.56) per day and about P210 or nearly $4 per week.

A more affluent household with five members can buy 25 kilos to 100 kilos a month. An affluent family of eight could buy 50 kilos of rice a month.

This, even if richer families have more financial means to buy other sources of carbohydrates.

Dagupan City resident Almira Chu, whose family owns a local hotel, said rice remains as their best daily source of carbohydrates.

Apart from rice, the meals in more affluent households include vegetables and meat. This could be one key difference between rich and poor households—the ability to buy other commodities to accompany their meals.

Unlike poor Filipinos who adjust their consumption just to make ends meet, rich families will continue to buy their set monthly consumption—no matter the price.

“Even if the price of rice is increased, our consumption remains the same since rice is the most important for a Filipino family,” Josefina V. Castañeda, municipal mayor of Lingayen, Pangasinan, said.

All rice

RICE consumption levels also differ according to age and occupation.

While older Filipinos would be content with half a cup or just a cup of rice per meal, students or those in their teens and 20s would consume more than double this amount.

Some young Filipinos would consume two cups to as much as four to five cups of rice every meal. This has made many of them regular patrons of restaurants that offer unlimited rice. They also rely on the seemingly “unlimited” nature of rice supply at home.

Jade, 19, said she usually consumes two cups per meal or six cups a day to as many as nine cups a day, thanks to “unlimited rice” offers by restaurants. Carlos, 21, said he consumes four cups of rice per meal or seven cups per day and would usually eat at home.

“Nakasanayan din. Sa bahay ako madami kumain ng kanin [I’m used to it. I eat a lot of rice at home],” he said.

Blue-collar workers such as delivery men, security guards and drivers are also patrons of restaurants that offer unlimited rice.

Manuel, a 31-year-old delivery man, still consumes three cups of rice per meal or as much as eight cups of rice per day. Alvin, a 30-year old security guard, eats as much as four cups per meal or eight cups of rice per day.

Drop by those small, makeshift carinderias that usually sprout on the edges of  major construction projects around the country. On any given day, one invariably sees construction workers buying two to three plastic packs of rice and just one tiny plastic bag of viand. Understandable because the rice can go from just P5 to P8  a pack in such sites, while one order of viand averages between P25 and P40.

Guesstimates

THE exact rice consumption of Filipinos is difficult to predict and depends on demographics as well as other socioeconomic factors. Nonetheless, it is still important for the government to be able to provide an estimate.

These estimates are crucial given the fact that the country is a net food importer.

In previous years, the Philippines was even considered the world’s largest rice consumer.  This puts a spotlight on the accuracy of rice estimates.

National Economic and Development Authority (Neda) Assistant Secretary Mercedita A. Sombilla admitted to the BusinessMirror there are discrepancies when it comes to the use of the SUA and the FCS. Sombilla said policymakers have known such discrepancies for years.

She added that harmonizing the data is close to, if not totally, impossible. She said that for one, it is only during the lean months when the SUA and FCS data actually match.

Despite these concerns, Sombilla said that as policymakers, the government needs to recommend imports given that the country does not really produce enough rice for Filipinos’ consumption.

She explained this is the reason for the quarterly inventory to go askew.

“We can’t harmonize data,” Sombilla said. “We never did quarterly estimates of supply and demand during those times because they were not accurate.”

Roehlano M. Briones, senior research fellow at the Philippine Institute for Development Studies, shared the same concern with the BusinessMirror about erratic rice inventory data.

“[The] common complaint by industry stakeholders is smuggling. That is actually a reality that we do not deny. So that means there [is] more volume coming into your stocks than recorded,” Briones told the BusinessMirror.

“I really cannot say if the rice inventory data [of the PSA] is that reliable. The National Food Authority (NFA) is probably accurate but for commercial stocks and household stocks, it is [difficult] for me to comment because the frameworks for those two surveys are based on an old survey way, way back during the National Statistics Office [the PSA predecessor] days,” he added.

Consumption

THROUGH the survey-based FCS, the government can estimate the country’s per capita rice consumption, while the SUA can estimate the country’s per capita net food disposable (NFD).

According to the PSA, the NFD refers to the amount of food commodity available in its original or unprocessed form for human consumption.

“This is usually equated or made equivalent to the quantity.”

The government uses both per capita rice consumption and per capita NFD to decide on the volume of rice needed to be imported in order to augment the shortfall in local supply, the Philippine Rice Research Institute (PhilRice) explained in its 2012 policy report.

According to PhilRice, the FCS and the SUA framework are both used by the Bureau of Agricultural Statistics (BAS) to estimate per capita rice consumption.

“FCS measures the amount of food actually consumed by sample households. Survey data are more accurate but availability is for selected years only because data gathering is expensive,” PhilRice added.

PhilRice explained that the SUA provides the government with annual estimates of per capita rice consumption, thus, becoming a more convenient input in agricultural policy planning.

Based on the FCS of the PSA, the country’s per capita rice consumption in 2015 to 2016 declined to 109.875 kg from 114.265 kg in 2012.

Prior to those years, the country’s per capita rice consumption grew to an all-time high of 119.08 per kg in 2008 to 2009 from 105.768 kg in 1999 to 2000. This was at 104.273 kg in 1995.

However, during the same reference years, SUA estimates showed otherwise.

In 1995 per capita NFD was pegged at 92.55 kg, while in 1999 it was at 99.68, subsequently breaching the 100-kg level in 2000 as it rose to 103.16 kg.

The SUA estimates showed that per capita NFD in 2012 was at 118.87 kg, 4.605 kg more than its counterpart from the FCS.

For the years 2015 and 2016, the country’s per capita NFD reached 111.62 kg and 107.84 kg respectively, according to PSA’s SUA estimates.

Vital statistics

HOWEVER, in 2012, PhilRice issued a policy report indicating that parameters under the SUA framework are already outdated, if not obsolete.

“The SUA framework was developed by the FAO [Food and Agriculture Organization] and the estimates for SUA parameters were tailored based on the country’s utilization pattern,” it said in March 2012. “For the Philippines, these estimates were determined by an interagency committee in the 1980s and are still being used up to this date.”

Rolando T. Dy, University of Asia and the Pacific Center for Food and Agri Business executive director, pointed out that having an updated and validated data on the country’s rice supply and demand would help government policy-makers come up with prudent decisions.

“For example, if situations are normal—just like in the past two years—the increase in the prices [of rice] will reflect the gap in the supply and demand,” Dy said.

“And that means we lacked importation to augment our supply because the prices went up. That’s under normal circumstances,” he added.

And one of the most valuable data or measurement needed by the government in monitoring the country’s rice supply and demand is the per capita rice consumption.

The PhilRice explains the importance of per capita rice consumption simply as a critical variable used in estimating the rice requirement of the country.

“Therefore, this has an impact on setting the import requirement of the country,” PhilRice said in a 2012 policy note aimed to improve the government’s decision-making on rice production.

“Increased per capita rice consumption means more imported rice,” PhilRice added.

Briones said the FCS is more reliable than the SUA estimates when it comes to the country’s per capita rice consumption.

Briones said there are a lot of “flaws” in the SUA parameters of the government as well as other statistical frameworks used by the PSA in coming up with data on rice supply and demand.

Missing

FIRST, there is the case of the missing supply.

The government must take into consideration the volume of smuggled rice into the country as part of its total staple supply, Dy said. Industry estimates that there is about 1 million metric tons of rice smuggled to the Philippines annually, he added.

Briones said the framework of the PSA’s production estimates is already outdated as it was last updated in 1990.

“So much over time the sample for the survey becomes irrelevant,” he said. “The farther the current period from the original frame period, the more errors would be computed.”

Citing anecdotes from local government units, Briones said the PSA usually understates its palay production estimates.

“I have not seen a single LGU that said that the estimates of PSA are good,” he added. “The LGUs seem to imply that production [estimates of PSA] are understated. Real production tends to be higher than those reported by PSA, which are based on quarterly palay production surveys.”

Outdated

THE PSA employs various “outdated” parameters with its SUA that could lead to a huge difference in total rice supply and demand of the country, according to Briones.

For one, the SUA sticks with its average milling recovery rate (MRR) of about 65.4 percent, which, Briones said, is crying to be reviewed.

“The milling recovery rate is problematic,” he said. “It has been used for decades now and has not been reviewed. A one percentage point [difference in milling recovery rate] could mean a hundred thousand metric tons.”

Citing the survey conducted by the then Bureau of Agricultural Statistics (BAS), the PhilRice said the country’s average MRR stood at 62.85 percent in 2008, which is 2.55 percentage points lower than the MRR used in the SUA.

PhilRice also noted that the average seeding rate and postharvest losses used in the current SUA are outdated.

Based on the Palay Production Survey conducted by the BAS, the average seeding rate in 2009 is 76.55 kg/hectare, higher than SUA’s 75 kg/ha, it said.

The Philippine Center for Postharvest Development and Mechanization (PhilMech) reports that the current estimate of postharvest losses (drying to storage) for rice is 7.55 percent higher than SUA’s 6.5 percent, the PhilRice added.

Factor out babies, OFWs

THE government should thoroughly consider the estimated population in dividing the total rice demand, according to economists at the University of Asia and the Pacific (UA&P).

For one, babies should not be counted in the country’s estimated population when getting the per capita consumption as they only consume the staple after about two years, Dy explained.

For another, overseas Filipino workers are not in the Philippines and thus, they must not be included in computing per capita rice consumption, according to Senen U. Reyes, UA&P senior management specialist.

The risk of underestimation or overestimation in the parameters of SUA could translate to higher or lower NFD, according to Briones.

“If there are errors, the residual would just absorb them. If the errors of overstated and understated would cancel each other, that is hard to say,” he said. “That is why I have little confidence in SUA-based estimates. I am more partial to sample surveys.”

The PhilRice said an error on the MRR is a crucial part in estimating the country’s per capita NFD.

“An overestimated [or underestimated] MRR can result in overestimated [or underestimated] rice supply, hence, higher [or lower] per capita NFD,” it said.

PhilRice added in its report the overestimated MRR translated into an additional 4 kg in per capita NFD, while the underestimated wastage equated to about 1.11 kilograms. Furthermore, the underestimated seeding rate meant a reduction of 0.04 kg.

“If the substitution effect, overestimated MRR and underestimated allotments for seeds and rice wastage were adjusted, the NFD would have been 114.42 kg/year in 2009, which is 4.6 percent or 5.5 kg lower than the reported amount of 119.92 kg/year,” it said.

Partnership

DY is urging the government to involve the private sector, particularly those in the rice trade business, in coming up with sound data on the country’s staple requirement.

“Involve people from the private sector such as the grain millers and retailers. Because they are on the ground and they know the trends in buying and consumption of rice,” he said.

“The government could discuss with the private sector at least twice a year to determine what is really the trend of the country’s rice consumption.”

Reyes recommended the government create an interagency committee that would harmonize available datasets.

Through the interagency committee and the private sector, the government could now come up with reliable and updated baselines on the country’s rice consumption, according to Dy.

“That will remove inconsistencies in data and would save the government money [from conducting various surveys],” Reyes told the BusinessMirror.

PhilRice recommended that the Department of Agriculture’s (DA) interagency Committee on Cereals “could set new estimates of SUA parameters, i.e., MRR, seeds, processing, and feeds and waste, to derive a more realistic per capita NFD figure.”

“The new estimates should then be endorsed to the National Statistics Coordination Board [NSCB] for approval and adoption,” it said in 2012.

Briones said in an ideal situation where there is no budgetary restriction, the government should conduct annual FCS. However, if financial resources are limited, a biennial survey would suffice, he added.

“Survey-based estimates are better as they allow people to respond to relative price changes—instead of estimates based on certain figures not driven by economic forces and dictated by political logic rather than economic logic,” Briones explained.

Representations

GRAINS Retailers Confederation of the Philippines (Grecon) President Jaime O. Magbanua said they have been lobbying the government to allow private representation in the National Food Authority Council (NFAC) for so long now.

The NFAC, the highest policy-making body of the NFA, also decides whether or not the government should import rice.

“The representation of the rice industry at the NFAC is only up to the farmers’ level and there is no stakeholder from the traders, millers and retailers,” Magbanua said. “We are arguing that we should be represented at the NFAC as we are the ones who know the actual situation in the field.”

Magbanua believes involving the private sector in the government’s policy-making process would result in more impartial and sound decisions.

“The government should be really able to determine how much volume of rice goes into our trade. We should determine how much imports are coming and needed,” he said. “And that is possible if we have a strong private sector involved in the process because we will be the one giving our inputs so that there is balanced information for the government.”

Futures

AGRICULTURE Secretary Emmanuel F. Piñol is cognizant of the importance of a sound database on the country’s food consumption.

In fact, one of the 10 basic foundations of a sound agriculture and fisheries program under the Duterte administration is having a national food consumption quantification study (FCQS), according to documents from the Department of Agriculture (DA).

“A nationwide survey will be conducted to determine the most consumed and in-demand foodstuff and agricultural commodities for all Filipinos,” the DA said.

“This initiative will also establish the food consumption rate in relation to population growth of the country, allowing the government to think ahead and pursue programs and projects that address food concerns proactively,” it added.

Thus, the DA partnered with the FAO last year to conduct the FCQS.

The FCQS, a $300,000-funded FAO study, would determine the current trends in food consumption by Filipinos.

“We want to get the data accurate,” Piñol told the BusinessMirror. “For example, this is a question for the longest time, what is the total consumption of rice per year by Filipinos? Is it 114 kg per capita or 109 kg? That 5-kg difference is a big difference.”

The agriculture chief said government targets to complete the FCQS before the year ends.

Once completed, Piñol said the FCQS would be presented before an interagency coordinating committee comprising of pertinent government agencies on the country’s food trade.

The FAO failed to reply to BusinessMirror’s request for comments before this story ran.

Confusion

ACCORDING to Piñol, having confusing data sets “affects our strategic planning.”

He explained that having a solid data set on the country’s food consumption would be more critical in a post-QR rice regime as the President would need all pertinent and updated information to exercise his powers under the law.

“Under the [tariffication] law, the President has a huge elbow room when it comes to tariffs. If he thinks the imported volume is already detrimental to the local rice industry then he could increase the tariffs,” he said. “That adjustment would still assure us of sufficient supply but ensure farmers are not hurt.”

In order to address the issues with the SUA and the FCS, Ilarina said the PSA is now in the process of adopting the Food Balance Sheet (FBS) recommended by the FAO by December this year.

According to the FAO, the FBS offers a comprehensive picture of the pattern of a country’s food supply in a particular period. An FBS is created per commodity or food item and details the number of processed commodities that are potentially available for human consumption.

“The total quantity of foodstuffs produced in a country added to the total quantity imported and adjusted to any change in stocks that may have occurred since the beginning of the reference period gives the supply available during that period,” FAO said.

Nutrients

THE FBS, Ilarina said, offers a lot more indicators when it comes to food consumption, such as nutrient content and energy content, which are not available in the SUA and the FCS. The FBS will also help make sense of the data on food sourced from the Food and Nutrition Research Institute (FNRI).

Ilarina said the FNRI data is very detailed but only takes into consideration the nutrient content of the commodity consumed in the household. The methodology for obtaining this data is very tedious and invasive.

In order to obtain the information, the FNRI visits specific households and measures the weight and nutrient content of all food consumed at home. Therein lies one of its limitations—it only accounts for food that is consumed at home.

These limitations make the FBS a more attractive option for the PSA. Ilarina said the PSA already has an interagency committee (IAC) for the Task Force on Food Balance Sheet. When the IAC has approved the indicators for the FBS, this will be presented to the PSA board for approval and then adoption. ###

Designed and developed by WebFocus Solutions, Inc. and hosted by Servobox | The icons used in this website are Designed by Freepik