The rice crisis

Anyone who drives by rice-producing provinces in the northern Philippines will notice the sprawling rice fields on the both sides of the roads — vast expanse of greenery as far as the eye can see.

 There are other rice producing provinces elsewhere, some near the southern tip of the archipelago —  Lanao del Norte, Davao del Sur, Cotabato and Maguindanao, among others -- and they, too have hectares and hectares of rice fields.

Indeed on the surface, it’s hard to imagine the Philippines has a rice problem. 

 But we’re all feeling it. Almost every week now, our helper complains of the increase in prices of basic goods including rice. From around P47 per kilo, the variety she buys now has gone up to P56 per kilo.

But like all things surreal here in the land of mayhem, it’s true. There is a rice crisis of sorts. It’s real and not imagined, stemming from a combination of factors that built up through the years — unfair trade competition, lack of support for farmers, inadequate infrastructure and many more.

Last year, the country produced 12.5 million tons of rice – the country’s highest production in history, as against the requirement of 13.1 million tons, including for food, raw materials for processing of value-added products and other needs such as for poultry and other animals.

But consumption continues to grow and production isn’t growing fast enough.

Rice production in the country is seasonal. It peaks during the last quarter of the year, while consumption in this rice-eating country does not change.

Rice tarriffication 

The solution on the table sounds promising, but only if the government implements it well and if it is matched by efforts to improve the competitiveness of local farmers.

The so-called rice tariffication proposal seeks to eliminate government’s control over the volume of rice imports and just allow market forces to come into play.

Under the plan, the government will slap a 35 percent tariff on all rice bought from abroad instead of restricting rice import volumes.

This is seen encouraging private traders to bring the staple into the country, allowing cheaper rice to enter the domestic market.  This could immediately tame inflation, fiscal officials said.

The benefits will trickle down.  Reduced rice prices would benefit poor households, which spend at least 20 percent of their budget on rice. Or maybe even more. Some of the desperately poor eat rice with salt when they can’t afford to buy anything else to go with it.

The catch

But there is a risk with the proposed solution and it’s the possibility of displacing local farmers because even with a 35 percent tariff rate, Philippine rice is still more expensive than the imported ones from our ASEAN neighbors such as Thailand and Vietnam.

In 2017, the average wholesale price of rice was P36.94 per kilo while the landed cost of rice from Vietnam and Thailand was P30.80 per kilo or a price difference of P6.14 per kilo, according to government data.

The big price difference and potential profit will surely attract businessmen to bring more rice imports.

Local farmers can only compete, if we enhance their competitiveness – something the government should have done decades ago. There is a constant need to help them increase their yield per hectare and lower their farm production cost.

As Vietnam and Thailand did, mechanizing farm processes can lower the production cost.

It is also important to help Filipino farmers market their products and strengthen farming organizations to improve their network. 

The funds to be raised from the tariff must be ploughed back to farmers to help them transition into a more liberalized regime. Financial support should be channeled to areas that will raise yields.

Dispatches from Datu Piang

In a sitio in Datu Piang in Maguindanao, farmers recently lamented  the lack of farm to market roads in their areas. One area just needs a five-kilometer connection to get to the main highway. They already asked the DPWH, but the request has fallen on deaf ears.

Having such roads remains an ardent wish for many of them.  Aside from the roads, the government should really take a serious look on what else they need. Maybe we wouldn’t even be facing a rice crisis if these farmers got the strong support they needed, a long time ago.

But they haven’t given up on farming. For many of them, it’s the only life they know.