Sunday, December 9, 2012

Food production, not RH

BACKBENCHER
Rod P. Kapunan
12/8/2012



The basic reason I sneer at those hypocrites advocating the passage of the reproductive health bill is not my religious belief. It is my contempt of their waste of time trying to limit our population when they should be concentrating on increasing our food production. I am pretty sure there would be no debate on the issue because basic logic tells us it is useless to argue on population control when we cannot even feed for our own people.

We must bear it in mind that we have a sizable number of people suffering from hunger. They are in dire need of employment, not necessarily for them to improve their lives, but just to be assured that by sundown, their families would have something to eat, and none of their children would go to sleep on an empty stomach. Such is most poignant because hunger now stalks a number of our people.

In fact, the debate on the issue of population is a fallacy that has long been exposed. Countries such as China, India and Indonesia have, for a long time, been pointed to as classic cases of countries where, accordingly, population growth has overtaken their economic development. For that, stereotype economists have written off prospects for economic development because of their runaway population growth.

No doubt, they were influenced by that doomsday theory of Thomas Malthus, a British economist who said that "should human population explosion increase faster than food supply, it would eventually reach a resource limit (overpopulation), and any further increase could result in a population crush caused by famine, disease, and war." Today, his theory stands as fiction because those countries have not only been able to feed their own people, but have become net exporters of rice and grains.

Like Malthus, the believers of that doomsday theory failed to foresee that advances in science could result in increased food production often outpacing their food requirements. Thus, instead of seeing our bulging population as a problem, they should focus on how to make use of our abundant labor to generate more production. These modern-day Malthusian alarmists even failed to analyze the close link between food production and industrialization. Increase in manufactured and industrial products allowed these countries to sell their goods at higher value for them to import from countries that could produce food products at much cheaper costs.

That now catalyzed the truth about the comparative advantage formula of Adam Smith. Gradually, as they continue to advance industrially, they apply their technology to boost their own food production. This now explains why their food production has correlatively increased at a much faster pace. Many predict that in the near future, China, India and those newly industrialized states would not only be able to achieve self-sufficiency in food, but could even join the league of food exporters. We can cite Japan, which has a population of 127.3 million yet remains self-sufficient in food production. In fact, we have more tillable and arable lands than Japan. Why could we hardly feed our own people?

Notably, after the ouster of Marcos, our food production has rapidly declined. That happened because we revised our entire approach to food production by focusing on how to increase the price of our goods as our way to encourage food production. Succeeding administrations then began abolishing the subsidy on farm inputs for accordingly, that caused the price of rice and corn to remain low. Since the core of their opposition was to deregulate the price of the commodities, that to them would be a form of incentive to the farmers that in turn would induce investment.

Unfortunately, the price of rice and corn astronomically increased. Our leaders forgot that a steep increase in the cost of production would be beyond the reach of many farmers. The magic of deregulation did not bring about the fortune of increased income. Their misery was compounded because subsidy for irrigation, for the purchase of harvested palay, and the credit support facilities were stopped. These were factors that liberated the country from being a perennial rice importer during the time of President Marcos.

Corollary to that lackadaisical decision was the catastrophic decline in food production. Many farms became idle, existing irrigation canals were abandoned and left to decay, and the land reform program suffered tremendous setbacks as many beneficiaries opted to sell their lands. They did this notwithstanding the fact that their earnings lagged from what the workers in the urban centers were receiving under the minimum wage law.

Saddled by that criminally inspired inflationary monetary policy, importation became cheaper than farming, although at a terrible cost to our consumers. The "Dagupan rice cartel" that manipulated the price of rice before martial law was resurrected, specifically after the scrapping of the presidential decree giving the National Grains Authority the monopoly to buy and sell rice and corn. The rice cartel did not only regain control of the business; it regulated the supply to keep the price high.

As rice traders continued to choke small farmers by pegging the cost of their palay during bumper harvest, multinational corporations like Monsanto imposed a tight monopoly in the supply of hybrid seedlings, which seeds could not be replanted for another crop season. Worse, the hybrid seedlings, which were genetically engineered, required much water, and heavy dose of fertilizer and chemicals to achieve the desired result.

In the end, the ruined and devastated agricultural farmlands has caused unprecedented migration of landless and farmers with small landholdings to the urban centers in search of employment just to escape hunger that now haunts them and their family. For the swelling number of squatters that have become an eyesore to the hypocrites, population is now the ire of the RH proponents.

Look who's talking.

rpkapunan@gmail.com

Currency wars

DIE HARD III
Herman Tiu Laurel
12/9/2012



The most significant sectors of the Philippine economy and population, the overseas Filipino workers (OFWs), exporters and business process outsourcing (BPOs), are facing a crisis. The peso is threatening dive below P40 to the dollar in 2013. The peso and the Filipino dollar earning sectors have already suffered 30 percent loss of their exchange income since 2004 when the peso rate was at P56, now it is at P40.85, further losses will cut even deeper into the purchasing power of the sectors. Even as the BS Aquino government boasts of 7.1 percent virtual reality growth, the real economy is actually much harsher on the people and consumers. In reviewing the Philippine peso exchange rate history, I scanned Internet sources through the night and found many historical revisionism in the data and interpretations of our currency history. They do not reflect what actually happened in the five decades past of the World and our country's currency history.

The Asian financial crisis of 1997-1998 for example was reported by Wikipedia without any mention of George Soros' role in the "speculative attack" on the Thai Baht and other Asian currencies and stock markets. It put the blame on Asian economies for allegedly mismanaging their financial situations, an interpretation that seriously distorts the facts. The Asian financial crisis was a premeditated attack timed at the point when Asia was at the peak of its financial boom, a boom the Western financial establishment itself encouraged. Then Soros and company pulled the rug from under the Asian economies. The timing of the Asian financial crisis is also construed by some as an attempt to subdue Asia as its Tiger economies soared, and the handover of Hong Kong back to China in 1997 signaled the final resurgence of the Sleeping Dragon.

Indonesia had bought the entire Naval assets of the defunct East German Republic to leap frog as a naval power in the region. The Asian financial crisis stopped Suharto right there and brought him down. The FVR regime did no better; the Peso plunged to P50 from P28, despite "Finance Manager of the Year" Bobby de Ocampo at his side. Other countries withstood the crisis like Malaysia with Mahathir's currency and capital controls, and South Korea population donated its gold and jewelry to the government to quickly repay the country's debts. Hong Kong turned the tables on Soros' ilk by "double play," defending its currency and boosting the Hong Kong stock market that speculators tried to short. On the peso's travails, I came across a blog, "The Coffee" of Mike from Valencia, Negros Oriental, an Ateneo 2005 graduate, working at a Makati technology company, who reviewed the peso history.

Mike correctly begins at the peso devaluation from P2 to P 3.70 under former President Diosdado Macapagal, but after that he seems to have been waylaid. Mike didn't explain that the precipitous crash came after Macapagal "decontrolled" the economy. Mike goes on to The Asian financial crisis and admits "I can't understand it, no matter how many times I check Wikipedia, but the peso crashes from P26 to P41 to the dollar in a single frickin' year."
That peso actually went as low as P45 to P48. Maybe Mike can pick up from our recollection and study the reality of "currency attacks." What I do need to correct is Mike's take on the peso crash under Estrada saying "Economic mismanagement and political instability… plus charges of corruption … peso nosedives …to P50." Then Mike stops there without citing the P56 crash of the peso in 2004 under Arroyo.

It was clear from Day 1 of the Estrada administration that forces were out to destabilize and oust the "masa" president. Erap disapproved of "sovereign guarantees," power and water rate increases, and the Omnibus Power bill privatizing the National Power Corp. Erap routed the Moro Islamic Liberation Front at Camp Abubakar which former US President Clinton tried to stop. The "currency attack" was kicker to finally oust Erap at Edsa II, coordinated between Makati bankers (led by Dick Romulo at the forefront of the preparing anti-Estrada bank witnesses) and the foreign bankers. Gloria Macapagal-Arroyo, whose regime The Coffee blog seemed to omit from discussion, doubled the Philippine debt over all previous presidents causing the massive peso crash to P56 in 2004. Today, the peso fluctuates at around P40.85, the OFWs, exporters and BPOs are already crying out for clear policy directions to defend their hard earned peso values vis-à-vis the dollar.

Finance Minister Guido Mantega of Brazil accuses the US of waging a "currency war" and strategic devaluing its currency to aid its economic recovery, but the BS Aquino government appears clueless and his BSP seemingly paralyzed. Every concerned Filipino, including Mike, should try to read Jim Rikards,' "Currency Wars" to understand that the a nation is already have always been victimized by a continuing "currency war" from Western and local financial powers.

(Watch GNN's HTL show, GNN Channel 8, Saturdays, 8:15 to 9 p.m., 11:15 p.m. and Sunday 8 a.m., and over www.gnntv-asia.com: "The True Picture of the Economy" with Ibon E.D. Sonny Africa and KME economist Hiro Vaswani; tune to 1098AM radio Tuesday to Friday 5 to 6 p.m. http://newkatipunan.blogspot.com)