The Risk of Rumors in Rice Reserves

For more than 3 billion inhabitants of this planet, rice is not merely a staple food nor an agricultural product for trade. Attached to it are deeply rooted traditions, psychological and cultural values that have acquired far greater importance than the nutritional benefits it provides. Governments in the Asia-Pacific region have long ago realized that maintaining adequate supply of rice at prices that can accommodate their poorest citizens is critical to social stability.

Reports of global decline in rice supply due to urbanization, industrialization, reallocation of land for biofuels, shifting land use for livestock to supply increasing demand for meat by a growing middle class in countries like China and India, poor harvests due to extreme weather conditions, growing population, low stockpiles, long term inadequacy of agricultural investment, and hoarding to take advantage of expected price increases; the focus of the population's attention veers toward this issue instantly. The Philippines, a country of nearly 90 million people that has been transformed from a self-sufficient rice producer to the world's biggest rice importer; and where 80% of the population spends 60% of income on food - 40% of which is rice - a shortage situation becomes a social volcano about to erupt.

Such a scenario is avoided by the country's past leaders, except President Gloria Arroyo. She skillfully orchestrated a series of initiatives that created rumors of rice shortages, to remove the media and the public's attention away from the series of scandals that continue to shake her administration; and into long queues of people buying rice secured by military personnel-to prevent riots and maintain order. She used her low credibility and negative trust rating to generate reversed results.

After news of the global food crisis and rising prices were reported by media, the President announced sufficient stocks up to the end of the year. Then she calmly appealed to fastfood chains to offer half a cup of rice to customers as an option to limit wastage. Also, high profile raids were conducted on hoarders, followed by government announcements in media of rice distribution at subsidized prices in several centers where the poor converge. The effect is that if there is sufficient rice, why these appeals, distribution and these raids? This created a mindset that the sufficient stock announcement is a cover up, and that stocks will run out. The panic removed the public's interest in scandals and shifted to getting their hands on rice. The media's daily broadcast and telecasts of congressional investigations followed the public's shift in focus. The scandals were buried and would likely not be resurrected for lack of interest.

Since rice stocks have been secured via Thailand's last delivery and a contracted forward delivery from Vietnam in 4 months, the President replaced the crisis she faced, for which solutions were difficult; with a non-crisis packaged as one, which is already solved. The President has often escaped tight situations with luck, stealth, or guile - but always injects her image with photos performing religious rituals, praying or being prayed over. The risks she took in using a global crisis to spin a local impact could have resulted in tragic consequences. But it seems she had all bases covered. Even the perception that the government cannot feed its people has built in excuses for her. Imports began 20 years before her time, 3 presidents before her were helpless in this subject, rice production grew 5% in the last 5 years, she has started a program towards increased productivity that would reduce imports by 25%.

Gloria Arroyo is as wily as a weasel and as astute as a fox. Her lucky streak may hold up until 2010, the end of her Official term. She remains unmindful of her unpopularity, her low credibility and negative trust rating. She does what she deems fit for the country whether its to uplift the nation or simply perpetuate herself in position until she steps down in less than 3 years. She has often skillfully outmaneuvered the opposition despite being in very untenable positions. At barely 5 ft., the diminutive Gloria Arroyo has cast a giant shadow in the Philippine political landscape. However, with all her power and all the luck she has enjoyed, the Filipino people always seem to be getting the short end of the deal.

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