Institute of Pacific Relations

Philippine Rice Control Showing ResultsAuthor(s): Catherine PorterSource: Far Eastern Survey, Vol. 7, No. 5 (Mar. 2, 1938), pp. 53-55Published by: Institute of Pacific RelationsStable URL: http://www.jstor.org/stable/3022308 .

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1938 Philippine Rice Control Showing Results 53

rivers. However, if a foothold by any alien power were obtained in this area and not contested by the United

States, a principle would be established which could lead to technical developments and scientific observa- tions making off-shore fishing for salmon in the other

regions of Alaska a profitable process. The same argu- ment may be said to apply to the salmon which head for the coastal streams of the Pacific States.

There is another aspect of the problem which has

implications for all the fisheries up and down the coast. Not only are other fisheries than salmon open to ex?

ploitation by nationals from other countries, as was attested when the halibut fishery, now undergoing a careful process of rehabilitation, was faced with the

possibility of being used by a large refrigerator ship owned by English and Norwegian interests, but also

they would tend to suffer by the dislocations resulting from the elimination of any one of the present fisheries. If the Alaskan salmon fisheries should be depleted the

tendency would be for men and gear heretofore em-

ployed therein to drift into other fisheries, increasing the pressure on those fish reserves and leading to

diminishing returns for each unit employed. That the raw products of the seas?the riches which

were earlier considered illimitable?are capable of

depletion and destruction, is a matter to which increas?

ing attention is being given. The intensity of fishing is something which must be carefully watched, if the

resources are to be preserved. This in turn requires conservatory regulation. The necessity for interna?

tional regulation when the resource involves the inter?

ests of neighboring nations has occurred in the past,

being sometimes met by treaty and commission such

as those in which Canada and the United States unite

for the conservation of the Pacific halibut and the

Puget Sound-Fraser River sockeye. Technical advance has also provoked another situa?

tion by which the conservation of resources hitherto

exploited solely by one country is com-

Salmon "An plicated by an increase in fishing inten-

American sity originating in nations which hith-

Resource" erto had no means of access to the re? source. In such a situation national

feelings and interests are involved. It might, in the

present example, theoretically be possible to work out

some system of building up the supply of Alaska salmon

by artificial rearing of fish, with the expenses to be

shared mutually by the United States and Japan so that increased intensity of fishing would not destroy the supply. Such a procedure would not seem practical in this case, however, in view of the prevailing belief

among the interests concerned that the salmon are an American resource which has been preserved by Amer?

ican effort and expenditure, to which this country has

an exclusive claim. There is also a definite school of thought holding

that international law is dynamic rather than static and should alter in relation to changed conditions. So that as technical advance lays open to foreign use maritime resources which have developed and been

used as though owned by one nation, the extent of waters surrounding that country over which it has

jurisdiction should be expanded in order to render the

authority of that country sufficiently complete as to

protect the resource. Such extension of authority is the basis of the bill before Congress.

For the purposes of international law, however, it is not enough to have unilateral action. If the United

States is to retain control over the

Question Alaskan salmon, the question arises of Demands how Japan may be persuaded either to Solution accede to such a definition of United

States sovereignty, or to agree to keep out of the salmon fisheries under some other arrange? ment. In view of the present international situation, it

may be expected that Japan will prove anxious to avoid friction with the United States over an issue which compared with other matters at stake is not of

great importance to Japanese well-being.

PRINCIPAL SOURCES:

Pacific Fishcrman, Seattle; U. S. Department of Commerce, Bureau of Fisheries, Fishery Industries of the United States (by R. H. Fiedler), annual; U. S. Tariff Commission, Re? port to the United States Senate on Salmon and other Fish, 1937; U. S. Department of Commerce, Bureau of Fisheries, Pacific Salmon Fisheries (by John N. Cobb), 1930; Douglas G. McPhee, Canned Salmon and the American Consumer, San Francisco, 1937; Congressional Record; Edward W. Alien, "The North Pacific Fisheries," Pacific Affairs, June 1937; U. S. Department of Commerce, Bureau of Fisheries, Laws and Regulations for Protcction of Fisheries of Alaska, 1937; Hcarings before the Committee of Merchant Marine and Fisheries, House of Representatives, 74th Congress. Second Session on H.R. 4254 and H.R. 8213, 1936; 1937 Salmon Packers Register, Seattle, 1937; O. E. Shostram, R. W. Clough and E. D. Clark, "A Chemical Study of Canned Salmon," Industrial and Engineering Chemistry, Vol. 16, No. 3, 1924; U. S. Department of Commerce, Bureau of Fisheries, Statistical Bnlletins.

PHILIPPINE RICE CONTROL SHOWING RESULTS

Catherine Porter

The Philippine National Rice and Corn Corporation, more familiarly known as the NARIC, has during the

first two years of its operation achieved a considerable

degree of success in stabilizing the price of rice. The

primary aim in establishing the corporation was to assure an adequate food supply, at a price within the

Filipino's capacity to pay; and at the same time, to assure the farmer a fair price for his crop. Since, for

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54 Philippine Rice Control Showing Results March 2

three fourths of the population, rice is the staple food, the Corporation's efforts have thus far been devoted to rice. The NARIC has been able to make substantial

progress in smoothing out the seasonal fluctuations in

price which work hardship to both producer and consumer.

Price stabilization, however, is only one aspect of the

complicated Philippine rice problem, and the NARIC

apparently recognizes that an attack on a broader front is called for. Also involved are the question of provid? ing adequate facilities for the storage of rice supplies, of regulating distribution and retailing, and the more fundamental problems of landholding, tenancy and

usury. There is need to devise methods of improving the unit yield, and to develop rice cultivation to the

point where the country will no longer have to depend on imported rice, even in years of unusual drought, floods, typhoons or pests. If production is increased to this point, however, there will be need to guard against the equally disturbing phenomenon of overproduction. It is true that this need is not immediate, but it is obvious that overproduction in 1948 can best be pre- vented by taking thought on the matter in 1938.

In its efforts at price control, the NARIC has oper? ated on principles made familiar by the stabilization

corporations of the United States Farm Board, the

Japanese rice control scheme and many other experi- ments in commodity valorization. The Corporation, capitalized in 1936 at F4,000,000, is prepared to buy rice at harvest time, when the supply is plentiful and the price consequently low. The tenant, hard pressed by debt, and lacking storage facilities of his own, was

formerly obliged to sell at whatever price he could get after harvest, often one which did not cover his cost of

production (see "Commonwealth Plans to Aid Filipino Tenant," Far Eastern Survey, Sept. 15, 1937, p. 219, and "Attempts to Curb Usury in Philippine Common-

wealth," July 21, 1937, p. 175). Then the warehouse

merchants, many of whom are aliens, could sell when rice was scarce on the market and much higher prices could be charged the consumer. Now, the tenant or small farmer can either sell to the NARIC or deposit his palay (uncleaned rice) in a Corporation warehouse and obtain credit against it.

Storage facilities in the Philippines are meager, and the Corporation must seek means of increasing ware? house capacity. In June 1937, the authorized capacity of bonded warehouses was estimated at some 2,220,000 cavans; of these, 84 were reported to be operated by Filipinos and 41 by Chinese. Last December the NARIC was reported to be building two new ware? houses in Cabanatuan, with a capacity of 250,000 sacks each. It is hoped that with the aid of the National

Bank, the Manila Railroad, and cooperative associa?

tions, additional warehouses will be established. The Corporation mills its palay and, when prices on

the market threaten to rise toward the end of the sea?

son, it makes its supply available at a price calculated to keep the cost to the consumer as low as possible. In its first year of operation, it met the comparatively simple problem of shortage by buying cheaper rice abroad and selling it at a price which tended to dis-

courage profiteers within the country from putting an exorbitant price on their supplies. Since the foreign rice was brought in under emergency conditions, no

import tax was levied. (In 1932, when the Rice Tariff Act was passed, the duty on imported rice was raised from 3 to 5 centavos per kilo, that is, to P2.85 per sack.)

By July 1937, the NARIC had imported over 2,000,000 cavans of foreign rice, and had realized a net profit of

nearly P2,500,000. Last year the NARICs buying price for macan palay

(the most abundant class, which is used as standard) was set at P2.50 per cavan, and the same price was

recently announced for this year's crop. The Rice

Commission, reporting to President Quezon in 1936, estimated that over a period of five years previous, the

price of palay was about P1.75 during the three months after harvest. Although the buying price of P2.50 is

generally considered fair, it has failed to satisfy a number of growers, especially in those areas which

experienced labor difficulties last year. In Pangasinan last summer a number of laborers emigrated to the gold fields, attracted by better wages. In Nueva Ecija, an? other leading rice-producing region, the milling indus?

try last October suffered strikes against low wages. With estimates of this year's rice crop already running below last year's, there has been some demand for a minimum price of at least P3.00, so that wages to field hands might be put at P1.00 daily. This standard has

already been set by an executive order of President

Quezon, of last August, fixing a minimum wage of P1.00

daily for government laborers in the provinces. Reli- able statistics on daily wages of non-government laborers are lacking but it is safe to assume that they fall far below that figure.

While the NARICs efforts at price stabilization have thus met with some measure of success, it is obvi- ous that they would be endangered should the domestic

supply of rice be brought to the point where it normally exceeded demand by a considerable margin. The United

States, Brazil and other countries have demonstrated that valorization is unable to cope with the situation created by chronic overproduction. Hence the Filipinos, in their effort to attain national self-sufficiency in rice, must be on guard against jumping from the frying-pan of shortage into the fire of surplus production.

It is apparent from available statistics that, under normal conditions, the fertile Philippine soil could soon

produce sufficient rice to meet the country's needs.

During the last ten years, in round figures, annual con?

sumption of rice has fluctuated between 22,500,000 and

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1938 Iron as the uFirst Fruits" of the Japanese Advance 55

25,000,000 cavans; from an area of about 1,800,000 hectares, the annual production of palay has averaged between 44 and 48 million cavans (the equivalent of 22 or 24 million cavans of cleaned rice); and the annual net import has varied from 200,000 to nearly 2,000,000 cavans. In only one year, 1934, was there a net export of some 20,000 cavans, that being the year of a record

crop of over 53 million cavans of palay. In every year since, there has been a shortage (see "Rice Shortage Accentuates Philippine Problem," Far Eastern Survey, Nov. 18, 1936, p. 251). In 1936, over 1,200,000 cavans of rice were imported, costing nearly P6 million. How much of this was purchased by the NARIC is not ascer-

tainable, but it has been pointed out that a large part of the foreign import is used by Chinese restaurants

operating in the Philippines. Prospects looked good for

an adequate crop in 1937, but labor difficulties, and

damage from drought and pests, reduced the Central Luzon crop considerably. In the first nine months of 1937 imports were far heavier than in 1936.

For the present, therefore, the immediate task of the NARIC seems to be to continue its efforts to stabilize

prices through buying some part of the domestic crops and importing cheap foreign rice as occasion demands. But the Corporation realizes that its long-term task is

quite as likely to be one of dealing with overproduction, and that one weakness in the present situation is the lack of coordination between rice production and mar?

keting. As sugar lands are converted from cash-crop to subsistence farming, as new agricultural lands in Northern Luzon and Mindanao are opened up, it is reasonable to expect that the area planted to rice will be greatly increased, especially as long as a fair return is guaranteed the farmer for his crop. The NARIC has

already suggested that a special census of the rice in?

dustry be taken, as it found statistics on production costs, consumption, etc, incomplete, unreliable or out of date. It has also made a detailed study of the Japa? nese rice control scheme; and will be able to avail itself of the results of similar schemes in other parts of the

world, before its immediate problem has altered greatly.

SIGND7ICANT DEVELOPMENTS

IRON AS THE "FIRST FRUITS" OF THE JAPANESE ADVANCE

In February 1935, the Far Eastern Survey drew attention to the fact that Japanese activities in North China were pointing toward the acquisition of the rich iron deposits of Chahar. On the 20th of December last, the Lungyen iron fields were formally reopened under

Japanese auspices. Present at the official ceremonies were representatives of the South Chahar, North Shansi and the Federated Mongolia "autonomous" govern? ments and directors of the Hsingchung Kungssu (the

Japanese-inspired China Development Co.) enfran- chised to operate the mines. As soon as the ceremonies

heralding the first economic evidence of Japan's "vic? torious advance" were completed, the Company began shipping to the hungry smelters of Japan the 60,000-ton stock which had been exposed to the elements since the Chinese extraction operations were halted nearly twenty years ago.

This step constitutes not only a landmark in the drive to make the Japan-Manchoukuo-North China economic bloc a reality (see "North China in a Japa? nese Economic Bloc," Far Eastern Survey, Dec. 18, 1935). It also represents a serious blow to those Chi? nese who had hoped that one day China could herself

exploit the Chahar reserves in the development of a

heavy industry. This latter aspect, as well as Japan's own driving need for iron, has already been explained in earlier issues (see "The Current Boom in the Japa? nese Steel Industry," Far Eastern Survey, Jan. 30, 1935; "The Iron Reserves of Chahar," Feb. 13, 1935).

The importance of the Chahar deposits may be judged

from the fact that they are estimated by the Chinese

Geological Survey to contain about 91,645,000 tons (not 1,000,000,000 tons so often reported as the result of an

original typographical error), nearly 40% of the iron reserves still left to a country not oversupplied with the metal. Professor H. Foster Bain regards these de?

posits as the most promising source of supply in all China. They are located some 150 miles from Peiping and are for the most part easy of access.

Historically the exploitation of this area dates back

only to 1918. In that year the Lungyen Co. was formed for the avowed purpose of extracting the ore of Yen-

tungshan in the district of Hsuenhua and in Lungkwan- hsien, both in Chahar province. Half of the capital of

Ch.$5,000,000 was supplied by the Chinese government, the rest by private interests.

Following the establishment of the Lungyen Co., a

light double-tracked railway about two miles long was constructed between the mine and Suimoufan in Yen-

tungshan and a branch line of about six miles from the latter to the Hsuenhua station of the Peiping-Suiyuan main line. In addition the same company erected a blast furnace with a capacity of 250 tons a day not far to the west of Peiping. Before the furnaces were com?

pleted, however, a slump in the price of iron ore took

place and, as a result, they were never blown in. Some

60,000 tons of the extracted ore were left as mute evi? dence of the Chinese attempts, and these, ironically enough, were destined for the Yawata Iron Works of the Japan Iron Manufacturing Co., during 1938.

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