Author : Lantican, Flordeliza A.; Sombilla, Mercedita A.; Quilloy, Karen P.

Summary : In response to the concern on the reliability of rice demand estimates as reported by BAS, the Department of Agriculture (DA) provided funds to conduct the Survey of Food Demand for Agricultural Commodities (SFD) on the consumption of rice and other agricultural commodities in the period 2008−2009. SFD is a nationwide survey which aims to determine the current and emerging consumption patterns of Filipinos with regard to basic food items coming from 11 commodity groups.1 The 2008−2009 SFD was conducted in four quarterly rounds from August 2008 to May 2009, with a total of 13,880 households for each survey round.

Using the SFD data, this study estimated the demand elasticities of rice in the Philippines, which would be used in calculating more accurately the rice demand level based primarily on changes in prices and incomes. Specifically, the study aimed to fit an appropriate demand equation to calculate income and price elasticity parameters for rice across income groups and between rural and urban consumers, and identify factors other than prices and income that influence rice demand changes. Using these elasticity parameters, it also sought to validate the level of per capita rice demand and determine the extent of commodity substitution with respect to changes of incomes and relative prices of commodities and assess the vulnerability or resiliency of the low income and rural groups to price and income shocks. Lastly, this study provided policy recommendations to safeguard food security of the more vulnerable segments of the society in case of the occurrence of another food crisis.