Press Release
March 12, 2008

Transcript of Senate Trade Committee hearing "On oil price increases and its impact on basic commodity prices"

On the scheduled food summit of the food sector on April 4:

MAR: I like all these summits, but our problem is not in looking at the problem. We know what the problems are. Our problem is in execution and political will. So you can have as many summits as you want to schedule, but my diagnosis is, if I'm your doctor, every summit is looking at another doctor. "Let's go to another medical center..." But you know what the problem is. It's in the execution, and frankly I'm disappointed, that if the solution is "Let's hold seminars," the problem is much bigger than that.

Just roughly, without going through my notes, just off the top of my head, if I'm asked, what's the situation, what's the output of this hearing, my response is, the outlook is not very good. In fact, the outlook is bad. Fuel is going to remain expensive. Rice is going to remain expensive. There seems to be no near-term option of importing it from abroad, because surplus sources are in difficulties themselves or have found other markets. Flour, I've been following the quotes of wheat and wheat has really gone up. Chicken is okay, but eventually chicken is going to be affected by the whole dynamic of corn, grains, etcetera. Pork, we don't even know what the problem is, or the size of the problem, but assuming even that there was no such problem, the dynamic of raw materials on chicken will impact pork as well. So what's there to look forward to? We're not looking at a benign price situation for food, so in fact you can save a lot of money from that summit, I already gave you what this problem is. You save time and money on that summit, this is the problem. Let's now find the solutions and let's do it.

I think it's better for that summit that each of your associations just formalize what you already know. It's difficult for us to interject ourselves in a process where it is not clear where our participation is. There are enough people that are saying there's a problem. Until there is acknowledgment that there is a problem. It's not even a political problem, or a pro- or anti-GMA problem. I'll give you a picture of the problem.

Over the last five years, over 300 million people have moved from abject poverty to above poverty level. And every year after, from where we are today, the projection is, annually, another 30 million people are going to move from abject poverty to above the poverty line. 300 million people have moved from one meal a day to three meals a day. So just imagine how much of that is sucking up the corn, the flour, the chicken, the rice, and everything else in the world. It's already apparent in metals and other commodities. This is not pro- or anti-GMA, or Senate versus executive. This is the thing that Cabinets and Price Coordinating Councils are there for, to look at these things, and say 'this is the terrain where we'll be living for the next three to five years. So we have to prepare our people for that. That's the situation. What you see in the mercantile exchanges are just the reflections of these problems. So is the solution opening up new hectarage, maybe that's a help. Is it lower factor inputs, maybe that's a help. You can put together a whole slew of solutions, but the situation is it's a step curve. The highs now are the new bottoms. It's a ratchet up. I'm not a fortune teller, I'm not a seer, but just take a look at commodity prices, the trading, the reports. Even just here, one morning listening to all of you. All of you are saying what the rest of the world is saying. And you put the two things together, that's the situation.

I think if you're really going to have a summit and spend all that time, energy and money, thought should go into directing it, so it's not just all complain, complain, complain, and we will be exactly where we were April 5 as we were April 3. That's my recommendation to you, for whatever it's worth.

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