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Sugar, Rice, Trade Deficits, and Thomas Malthus

In my recent trip to Negros Island, the sweet spot of the Philippines, I was greeted by billboards on Silay's McKinley Road and Bacolod's Lacson Street asking the question, "Pinoy Ba Sugar Mo?".

This is part of the sugar planters' campaign to put into question the unregulated importation of High Fructose Corn Syrup which displaces the use of locally produced sugar and, thereby, negatively affects the balance of production, threatening the livelihood of sugar industry workers and impeding the growth of the sugar industry.

Taken to a larger scale and not limiting it to sugar alone, I am reminded of what it was like when I was younger and there was this program called, Masagana 99.  This has more to do with rice rather than sugar (although nutritionally, white rice is still sugar).

As we know it, Philippine agriculture contributes about 12% of the national GDP but 60% of its population is found in the rural areas where agriculture is the main industry. Agriculture employs 30% of the population which is 102 million. 

But with 60% of its population in the rural areas, the Philippines is No. 8 in the world in rice production but is the No. 1 rice importer in the world too.

This is the dichotomy of the agriculture sector of the Philippines, being No. 8 in production and No. 1 in rice importation. Notwithstanding that rice is the staple food of the Philippine population. There is a correlation not only between rice production, rice as the principal crop and population.
President Marcos and Masagana 99

In 1977, for the first time in its history, the Philippines became a rice exporter but that was the only time that happened. That was a also a time when the Philippine population was only 30 million or so. It should also be noted that a vigorous population control program was being implemented since it was during Martial Law. Economic planners were then projecting a population explosion by the late 1970s and early 1980s.

When Martial Law was declared in 1972, various programs were formulated and implemented to strengthen the agricultural sector. Foremost was the declaration that the entire country was a Land Reform area. Second was the launch of programs such as Masagana 99 and Biyayang Dagat. 

Malthusian Theory

The 1798 piece entitled "An Essay on the Principle of Population" by  Reverend Thomas Malthus, presented that population growth is exponential while food production is arithmetical. It centered on a certain point whereby population growth will outstrip food production - and there lies the seed of crisis.

Thus, checks will be achieved by the crisis wherein premature deaths, wars for resources, disease brought about by population pressure called the Malthusian Catastrophe will revert population back to lower sustainable levels. 

The Malthusian Theory was said to have been discredited wherein 18th Century thought did not consider science and technology that would significantly increase food production in the coming years.

Green Revolution

The period wherein technology transfer answered food production requirements started to occur in the 1930s up to the 1960s. This period saw the surge of agricultural output using new technology developed during those years. It was called the “Green Revolution”. 

These are composed of High Yielding Varieties of wheat and rice, the use of fertilizers and managed irrigation of these planted crops. There was also distribution of high yield seeds and use of pesticides that were not utilized before the Green Revolution.

In the Philippines, The Ford Foundation and the Rockefeller Institute helped establish the International Rice Research Institute (IRRI) the precursor of the current Philippine Rice Research Institute (PhilRice). The IRRI introduced the IR8 which was superior in yield to the former indigenous rice varieties. IR* required the use of fertilizers and pesticides. This made the Philippines a rice exporter. This enabled the Philippines to increase its rice production from 3.7 million metric tons a year to 7.7 million metric tons in 2 decades. But again that is an increase of almost 100% but population at that time was a little more than 30 million and by now it is 102 million.

Masagana 99

In 1972, 28 typhoons visited the Philippines. This caused widespread flooding in Central Luzon. 2 years before, 40 days of rains also inundated the same areas in Luzon, then termed as the “Rice Granary” of the Philippines. 

When Martial Law was declared in 1972, there was already a rice crisis. This was when consumers were lining up to buy rice and was restricted to only 5 kilos each per purchase. The grain trucks of the National Grains Authority (NGA) were awaited since their return would not be regular. This also resulted in rice hoarding by unscrupulous traders.

By then, President Marcos would declare the Philippines a “Land Reform Area” and the Tenant Emancipation Act was implemented.

Masagana 99 program was launched. Masagana meaning Bountiful was a catchword in agriculture. The “99” pertained to 99 cavans per hectare planted with rice. Previously, before the introduction of IR8, yield ranged from 10 to 50 cavans per hectare. IR8 varieties, fertilizers, pesticides and irrigation were used in combination so as to have 99 cavans per hectare a reality.

Yield was increased to 99 hectares but the inputs such as fertilizers, pesticides and irrigation increased the cost of production for the farmers. Thus, production was increased but not the income of the farmers. This led to the further economic marginalization of the rural sector.

But the bigger cause of the failure is systemic since the Land Reform included only rice and corn lands. The system of awarding the land was also a source of corruption so that only 2% of the farmers were given their land from 1973 to 1986. 

Further programs that sought to increase production continued. By the time of President Gloria Macapagal Arroyo, the Golden Rice Program claimed 180 cavans per hectare as yield and currently, the records stands at 230 cavans per hectare.

Unfortunately, the Philippines is still a net rice producer and as mentioned above, No. 1 in rice importation worldwide. 

What now?

The present agricultural situation is now intertwined with national food security. Until a more comprehensive agricultural program is formulated and implemented, the same structural infirmities in the agricultural sector will remain and will be exacerbated by an increasing population and decreasing arable land available for the agriculture industry.

It seems that Thomas Malthus continues to hold sway in Philippine agriculture for now.