The Economics of GMA’s Cheap Rice Distribution Program

To help the poor cope up with the increasing prices of food products particularly rice, the Arroyo Administration, through the National Food Authority (NFA), has instituted the selling of the P18.25 and P25 rice per kilo. But is the government really helping the poor or is it just worsening poverty?

Angela is a first year high school student and the eldest of the four children. Her father works as a construction worker and takes home P250 per day while her mother does laundry in the neighboring subdivision and earns between P100 to P150 per day. Angela’s family literally lives “over the hedge” because just like in the 2006 movie animation, a residential subdivision suddenly popped-up in their community without due consultation among the tenants of the then-rice fields.

From time to time, Angela would wait for hours in queue just to avail of the cheap rice sold by the NFA. If she’s lucky, the wait would be for a couple of hours but in most cases, it’s three and even four. For this, Angela would either be absent or late in class depending on the arrival of GMA’s mobile store. Angela attends a public school wherein education is cheap and instruction is done in two shifts – of course, courtesy of the sitting president’s program to conserve budget for the construction of new school buildings and hiring of additional teachers.

Because of Angela’s tardiness, frequent absences as well as poor performance in class (she also had to do household chores thus sacrificing the preparation of her projects and assignments), her teacher called for her parents. Obliged, her mother had to sacrifice one work day costing the family P150 just to meet with the teacher. The meeting resulted to the agreement that Angela’s education would be considered a priority.

The meeting became beneficial to Angela but only in part. From time to time, her mother, or in worse cases, her father, would take a leave from work just to buy the P18.25 government rice. This simply means a deduction of P100 – P250 daily income or about P300 – P750 weekly income as the mobile store visits only their community thrice a week. Well, P250 can be dispensable if the family can buy a whole month’s supply but because of government regulation, each buyer can only buy as much as three (or in some cases, five) kilos of rice per visit.

And since a significant part of the income is wasted just to wait in queues for the cheap rice, Angela is back again to absenteeism. One, she cannot submit her projects and, two, she cannot buy the books and other school supplies that she needs. And because she is already feeling some shame, her social life is affected. From time to time, she also lacks transportation allowance. Thus, additional absences. If this continue further for the rest of the school year, Angela would either fail in school or pass the school with half-baked knowledge. In both cases, she will bear the consequences when she try to enroll in college or apply for a job later. Having a half-baked instruction or education all because of the cheap rice distribution of Gloria Arroyo will negatively affect Angela’s future.

Angela’s case is but one story. There are still a number or even millions of others who also have their own versions. These include the poor households with one-bread winners, those who rely on the buy and sell of “bote, dyaryo, garapa!”, and the scavengers. In the end, these will all show that as the economic condition of the target cheap rice beneficiary worsens, the greater the negative impact he or she will suffer from the “Vulcaseal Approach” of the administration – “vulcaseal” because the idea is to provide a patchwork short-term solution rather than a long term planning that will address the root cause of the problem.

So, is the government helping the poor with its cheap rice program? Sad to say, that would be a wish upon a star. In the final computation, the cheap rice is costly after all. Too bad, our economists are too intelligent to think of it this way.###

(This article also appears at Albay Journal in the column The Sidelines.)


2 thoughts on “The Economics of GMA’s Cheap Rice Distribution Program

  1. Everyone is worried about jobs going overseas, but I think they should be more optimistic. America is great for generating new jobs and dealing with change. My grandfather said railroads once lost a lot of business when electric companies switched from burning coal to nuclear power. Railroads also needed less workers when trains stopped using cabooses. Yet while the railroad jobs may have disappeared, new jobs like webpage designers and video store clerks have appeared. Horse buggy manufacturers became car manufacturers and typewriter companies now make computers. Many industries that were supposed to disappear like movie theatres due to VCR’s and accounting because of computers have never been stronger.

    Farmers made up 90% of the labor force in 1790, but only made up 2.6% of the work force in 1990. While women only made up 18% of the work force in 1900, 46% of the work force was female in 2007. There are fewer farmers yet more men and women are working now because the labor market is more diverse with new jobs.

    Jobs that are shipped offshore will be replaced by new technical jobs in the US.

    While manufacturing jobs may go overseas to cheaper locations, the United States still manufactures more than any other country.

    Even if more jobs go overseas, America will always have factories. I highly doubt that the United States will buy fighter jets from China. The price of labor may be cheaper in Asia now, but as oil and shipping prices rise, buying American products will not seem to be so expensive. Chinese products also have a reputation for poor quality and counterfeiting. BMW does not worry that Chinese car companies will steal their customers.

    Many jobs cannot be outsourced, either. You are not likely to call a doctor, lawyer, mechanic, mover, driver, electrician, real estate agent, or plumber in China to fix a problem you have in the USA. Are all the farms, restaurants, churches, government workers, and athletes in the US going to be shipped overseas, too?

    Even if all the manufacturing jobs in the United States went to China, wouldn’t the Chinese need American skills? You could move there and teach English. Most of those container ships returning to Asia are EMPTY. Why not think of something the Chinese would like to buy? Americans are creative. Do you think China will be known as the new Disney and Hollywood? Will China become famous for apple pies, hamburgers, hot dogs, baseball, gun rights, democracy, free speech, and religious freedom?

    While change is sometimes scary and being cautious is good, hysteria is not. Think for yourself and don’t be a Chicken Little.

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