Dec. 12 (Bloomberg) -- Inside his northern Philippines granary, Marlon Ventura stirs gray zinc phosphide into a bowl of boiled rice, making a garlicky, toxic meal for rats.

He puts the bowl on a dirt floor dotted with grain spilled from vermin-gnawed sacks. Each year, rats steal or foul almost three-quarters of a metric ton (1,654 pounds) of his rice. The cost -- 12,240 pesos ($250) -- equals 7.8 percent of his farm’s net income.

“I’m frustrated because we’ve not got any support from the government,” says Ventura, 28, who farms with his three brothers and spends 900 pesos a month on rat bait. “When you have very little money, every grain you can save matters.”

The world is wasting enough rice this year to feed 184 million people, about a fifth of those who are undernourished, based on estimates from the Food and Agriculture Organization of the United Nations in Rome. The amount lost between harvest and consumers globally totals at least 48 million tons, says Concepcion Calpe, a senior economist with the FAO.

Rats aren’t the only species responsible -- humans also play a role. Lulled by low food prices since the 1970s, donor nations and lenders halved aid to agriculture in developing countries, the World Bank says. Corrupt leaders and bureaucrats siphoned off much of what did arrive, according to the U.S. Agency for International Development. As a result, grain storage and processing remain primitive in many developing countries, which have the greatest losses and highest rates of hunger.

1 Billion Hungry

The lack of investment in shoring up the grain- delivery chain was among man-made causes of the food crisis of 2008. Other ingredients in this recipe for famine included trade policies that pushed developing nations into global markets and speculators who drove prices higher by doubling bets on grain.

Now, after price increases in three of the past four years, the number suffering from chronic hunger is approaching 1 billion of the world’s 6.8 billion people, the FAO says. At the same time, the UN estimates that at least 15 percent of all staple crops, including rice, corn and soybeans, will be consumed by pests, spoiled by water leaks or otherwise go to waste after harvest this year.

Aid Reduced

“The problem of post-harvest losses is a casualty of the underinvestment in agriculture generally,” says former World Bank economist David Beckmann, now president of the church-based advocacy group Bread for the World in Washington. “Taking care of the problem requires a lot of investment, a lot of effort and a lot of development.”

As the global credit crunch and rising production costs threaten to reduce harvests and push up prices in the future, UN authorities say they fear cash-strapped governments won’t make the investments needed. That’s precisely what happened after the FAO -- later joined by then-Secretary of State Henry Kissinger -- called for a “war on waste” in the 1970s. An initial infusion of spending stalled after China, India, Indonesia and the Philippines doubled their combined cereal grain production by the mid-1980s.

Donor governments and international development agencies slashed agricultural aid to $3.4 billion in 2004 from the equivalent of $8 billion in 1984, the 2008 World Development Report said.

Chain of Waste

Rice, a key part of diets in Asia, Latin America and many African countries, has about 3,500 calories per kilogram, according to the FAO. Adults need to consume 2,500 calories a day from carbohydrates, proteins and other nutrients to stave off malnutrition, the agency says. If it were possible to achieve perfect efficiency, the estimated 48 million tons of rice losses “would be sufficient to fully meet the average calorie intake of 184 million people per year,” Calpe wrote in an e-mail.

In the Philippines, the world’s largest rice importer, farms like Ventura’s begin a chain of waste that lost about 2.44 million tons of the unmilled cereal last year, worth about 31.7 billion pesos ($644 million) at November’s prices. The tonnage represents about 83 percent of the country’s milled rice imports, and would be enough to feed 6 million of its 93 million people.

Sun-Dried Rice

Controlling the rat population on his 4 hectares (10 acres) is just one of Ventura’s challenges. The family farm, nestled on a riverbank in Santa Veronica, 137 kilometers (85 miles) north of Manila, produces 36 tons of rice a year, generating about 160,000 pesos. That is 7.5 percent lower than the national annual average net income of 173,000 pesos.

In his granary, stacks of 50-kilogram (110-pound) sacks are draped with plastic sheets because the roof leaks. Three years ago, 400 kilograms of rice were soaked and ruined.

Outside, Ventura dries rice on a 5-meter-wide quilt of woven-plastic bags. White ducks waddle and peck at stray kernels under the scorching sun. Other Filipino farmers dry their rice on the road, where it’s run over by vehicles or eaten by birds. At sunset, Ventura shovels the rice into sacks for sale to brokers.

Jospicio Fernandez, a miller in San Jose, jabs the sacks with a 50-centimeter sword, collecting samples to gauge the rice’s size and quality. The holes remain. As much as 30 kilograms of rice spill from each 400-bag delivery. Some grains sprout on the roadside.

No New Bags

Ventura can’t afford new bags, so he patches old ones. Some farmers reuse sacks as many as six times before discarding them, Fernandez says. In developed countries, the bulk movement of grain using dump trucks, augers and conveyor belts avoids most of this kind of spillage.

Ventura estimates that more than 360 kilograms from each of his two harvests -- or enough to feed four Filipinos for a year -- are spilled, soaked, blown away or eaten by pests. Rats consume two of every 100 bags.

“There’s not much else we can do because we just don’t have the financial resources,” Ventura says.

Ventura’s losses could be at least halved by a $7,000 machine that blasts hot air over wet rice laid out on trays, removing the moisture that’s the main cause of spoilage. The technology would dry his entire harvest in two days and give rats less time to feast in his granary.

Marcos’s Long Shadow

Such dryers are beyond most farmers’ means in the Philippines, where private ownership of land is restricted to 5 hectares or less. For the past 14 years, the government hasn’t bought any either; it couldn’t afford them, says Rosendo Rapusas, acting deputy director of the national Bureau of Postharvest Research and Extension.

The bureau’s 2008 budget is 86.9 million pesos ($1.8 million). Filipino farmers lost more than 350 times that amount in rice last year, based on November prices.

“Our budget is too small, so we have to prioritize,” Rapusas says. “You can’t blame the government. They had other, more pressing priorities.”

Those include cleaning up the financial mess left by former President Ferdinand Marcos, a dictator who fled Manila in 1986 amid a popular revolt. In 2005, the government devoted 31 percent of its budget to interest on foreign debt accrued largely during his regime. Marcos, who died in 1989, embezzled $5 billion to $10 billion over 21 years, according to Transparency International, a non- political group based in Berlin.

‘Grand Agricultural Theft’

More recent allegations of wrongdoing were linked to funds meant to buy fertilizer for farmers. At least 120 million pesos were diverted to current President Gloria Arroyo’s 2004 election campaign, according to the Philippine Center for Investigative Journalism, citing records from the national Office of the Ombudsman and the Commission on Audit.

It was “a premeditated, systematic and grand agricultural theft,” a Philippine Senate inquiry later found. Arroyo denied the allegations and accused senators of “playing politics in these investigations.”

In April, as rough rice futures jumped to record prices, Arroyo said her government would spend 43.7 billion pesos to improve irrigation, build storage facilities and clear farm-to-market roads. The nation now aims to produce 98 percent of its food needs by 2013.

Arroyo’s Plan

Arroyo’s plan includes distributing 2,000 rice-drying machines to speed processing and reduce waste. They’ll initially go to cooperatives with access to irrigation systems. That excludes Ventura.

“Access to government-subsidized seeds and other farm supports from the state are determined by the votes a political leader in your village can deliver,” Ventura says.

In 2004, his neighborhood was promised 100,000 pesos by a congresswoman to build a concrete slab for drying rice. The village chief instead paved a road, the farmers say.

While the road itself is an improvement, “no one from the government has bothered to come and see us here to check what we need,” Ventura says.

The third-generation grower says he’s fed up.

“I wouldn’t want the next generation to be farmers,” he says in the concrete, three-bedroom house he shares with his wife, parents and three brothers. “I’d do everything I can to put my kids through school so they could have a better life.”

(Recipe for Famine: Part 5 of 7.)

To contact the reporters on this story: Jason Gale in Singapore at j.gale@bloomberg.net; Luzi Ann Javier in Singapore at ljavier@bloomberg.net.

Last Updated: December 11, 2008 19:01 EST