AMID concerns expressed by the Department of Agriculture (DA) on the computation of the country’s Self-Sufficiency Ratio (SSR) in rice, the Philippine Statistics Authority (PSA) said the formula is consistent with international standards recommended by the Food and Agriculture Organization (FAO).
On Tuesday, BusinessMirror published a story on the Philippines’s SSR in rice which fell to 77 percent in 2022, the lowest in more than two decades, as the country remained one of the world’s largest importers of the staple (full story: https://businessmirror.com.ph/2023/10/10/rice-sufficiency-level-falls-to-24-year-low/).
“The SSR measures domestic production as a share of domestic utilization. (It) indicates the extent to which a country relies on its own production, i.e. the higher the ratio the greater the self-sufficiency,” PSA said in a message to BusinessMirror on Tuesday.
PSA explained that the SSR indicated the extent to which a country relies on its own production, i.e. the higher the ratio the greater the self-sufficiency.
This means, if the SSR is less than 100 percent, there is an inadequacy of production to cope with demand and if the SSR is equal to 100 percent, there is just enough produced to support population food needs. If the SSR is higher than 100 percent, there is more than enough to support domestic requirements.
“Further, last 02 February 2021, a tripartite meeting among Department of Agriculture represented by Undersecretary Leocadio Sebastian; National Economic and Development Authority (represented by) former Secretary Karl Kendrick Chua; and PSA (represented by) Undersecretary Claire Dennis Mapa to discuss Harmonization on Agriculture and Fisheries data. In this meeting, the PSA clarified and explained the procedures and data being used for the computation of SSR for rice,” the PSA said.
Agriculture Undersecretary Mercedita A. Sombilla agreed that there have been discussions between DA and the PSA regarding the SSR formula. But the main concern of DA was the use of the Supply Utilization Accounts (SUA) of Selected Agricultural Commodities.
The SUA is based on production or supply and treats rice consumption as merely a residual after computing for the rice stocks and removing exports and waste, among others.
“This is because of their SUA methodology where residuals are added to food use. Food use is therefore food availability, no food demand. So if imports are huge and residual is huge, then the SSR is lowered. PSA SUA should not be used to compute SSR,” Sombilla told BusinessMirror.
Population factor
Meanwhile, Monetary Board Member Bruce J. Tolentino told this newspaper that one factor that was not discussed by the story published by BusinessMirror is the growth of the Philippine population.
Tolentino said the increase in the country’s population affects the self-sufficiency in commodities, including rice. However, he said what is more important to consider is food security rather than self-sufficiency.
“When the Philippines achieved marginal self-sufficiency for a year or two around 1979, population was just around 40 million. Now, how many are we feeding? Moreover, as rice prices become affordable, consumption will grow. One way to ensure self sufficiency is to allow rice prices to increase so much that Filipinos will not be able to afford it,” Tolentino said.
On Tuesday, Agriculture Undersecretary for Rice Industry Development Leocadio S. Sebastian said it is important to check the formula used by the PSA in calculating the rice SSR.
Sebastian pointed out that the PSA’s formula takes into account importation as part of the country’s overall supply base, and does not consider the local demand in a given year.
The PSA’s formula for SSR in any commodity is as follows: local production divided by the total supply (production plus imports minus exports) multiplied by 100 percent.
“Hence, if you have more rice imports, the rice sufficiency will go down. The formula is not local production minus exports divided by local demand,” Sebastian told the BusinessMirror.