Monday, September 26, 2022

Agri Econ 38, Fermin Adriano article on "Full blown food crisis"

An article the other week that I find alarmist. 

Food crisis
Fermin Adriano  September 16, 2022

“MY bold prediction is that by the end of this year or early next year, the country will be facing a full-blown food crisis if corresponding corrective measures are not undertaken by the government.”

Very limited numbers presented by the author to conclude "full blown food crisis." Like how many metric tons (MT) of rice, corn, vegetables, sugar, etc will be the projected gap relative to demand to conclude such. If such numbers cannot be properly shown, then alarmist projections cannot be justified. Silence is golden. No harm in  making non alarmist conclusions. Which might prod some people and traders to start food hoarding. Unnecessary damage can result from unsubstantiated projections.

For now we shd ignore his  alarmist ""full blown food crisis " projections by end 2022 or Q1 2023, and there should be no unnecessary hoarding of rice, corn, sugar etc.

The real, non fictional, most recent food crisis happened in Sri Lanka. Thousands of hungry people marching on the streets demanding more food supply at low price. For one, Sri Lanka has very idiotic climate drama policy of zero chemical fertilizer, plus their forex reserves went down to 1 month, 1 week value of imports, PH has about 10 months import cover. (This photo of food queuing in Sri Lanka from Foreign Policy)

Good thing that he proposes Agri trade liberalization. Now since that's not likely to happen, he warns "full blown food crisis" just 1-2 quarters from now. Some or many scaredy folks might start hoarding food, sacks of rice, corn, animal feeds, fertilizers etc. 

A "full blown food crisis" in the PH would look something like this:

1. Our average annual rice deficit of about 0.8 million MT, by December 2022 or Q1 2023 to reach 3 million MT or so.

2. Our forex reserves by October only about 2-3 months of import cover, so we cannot pay enough the huge food imports we need by Nov-Dec.. And rice exporters won't sell to us. But as of Sept our reserves were about 10 months of import cover.

3. similar estimates on supply deficit for rice, vegetables, sugar, etc.

All these are not quantified in the Adriano article. He just quickly concluded a "full blown food crisis", which to me is just sensationism.

Even if govt does not take corrective action like Agri import liberalization, it's still far out that we'll have full blown food crisis by Dec 2022 or early 2023. If you don't import food  now, then you can still import by Nov or Dec to rest of 2023. Why? Bec of our big reserves level. Sri Lanka didn't have that leeway. Only about 1 month, one week of import cover for food, oil, medicines etc. The exporters abroad didn't sell to Sri Lanka on those months fearing they won't be paid. Hence a "full blown food crisis" there, but far out to happen in the PH.

On farm productivity, consider this in tilling one hectare of ricefield:

By carabao, about 2 weeks.
By hand tractor, about 4-5 days.
By old model rotor tractor, about one day.
By modern rotor tractors, Yanmar or Kubota, 2 hours.

More machines and fossil fuel use means faster work, higher productivity. These things been evolving fast in PH farms -- lots of machines now in use. Rotor tractors not hand tractors. Harvester-thresher combiner machines, not manual harvest then threshers. Trucks transport, not carabao transport of crops. These alone immediately raise productivity and reduce crop losses. Those machines use lots of fossil fuels, good that most farmers don't believe those climate drama, anti fossil fuel drama.


See also:
Agri Econ 35, High prices of poultry, beef, hogs, palm oil, canola, oat, August 04, 2021
Agri Econ 36, High beef, wheat, coffee, ammonia and fertilizer prices, January 21, 2022
Agri Econ 37, Sri Lanka food catastrophe, July 15, 2022.

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