Farmer groups say the country's position as the top rice importer in the world should be more reason to junk rice liberalization.
The STAR/KJ Rosales
Is the Philippines being the world's top importer of rice a cause for alarm?
Franco Luna (Philstar.com) - November 12, 2019 - 5:18pm

MANILA, Philippines — The Bantay Bigas group on Monday warned that the country's rank as the world’s top rice importer shows that the Rice Liberalization Law has thrown the archipelago into an “aggravated food import-dependence and away from attaining self-sufficiency and self-reliance.”

This came after the release of a US Department of Agriculture-Foreign Agricultural Service report that showed the Philippines is beating China with three million metric tons of rice imported this year, despite China’s population of 1.4 billion compared to the 110 million living in the archipelago. 

Republic Act 11203 or the Rice Tariffication Act lifts import restrictions on rice but imposes tariffs on those imports. This means that anyone can import rice as long as they pay the necessary 35-40% in import taxes,collections of which are meant for mass irrigation, warehousing, and research.  

‘A crime versus the Filipino people’ 

Part of the rationale behind the law’s passage is the country’s membership in the World Trade Organization, whose rules stipulate the elimination of trade barriers. Yet, the development comes as something of a tipping point for farmer groups in what many have already cautioned as a worsening rice crisis caused by the law. 

“[This] will turn Filipinos into beggars of imported rice. We all have witnessed this law causing bankruptcy to rice farmers, and this will lead to displacement and ultimately declined productivity,” Amihan secretary-general and Bantay Bigas spokesperson Cathy Estavillo said in a press statement. 

Similarly, former Anakpawis Rep. Ariel Casilao said in a press release that the law was "clearly detrimental to rice production [and] national food security based on self-sufficiency and self-reliance.” He said that this would [lead] to food import-dependence, and the “downgrading availability and accessibility of food."

"The Duterte regime is carrying out a socio-economic crime, and essentially violated the Filipino people’s inalienable right to food and free food and agricultural system."

Stocking up

On the potential effects of import-dependence, however, Ateneo economics professor Ser Peña-Reyes, PhD says that it shouldn’t matter much as conditions should soon taper down. 

"Import-dependence is not necessarily a bad thing," he said in a phone interview with Philstar.com. "Right now, we’re just stocking up, but eventually we're going to taper down on imports and rely more on domestic production. It’s not going to be permanent." 

For Peña-Reyes, the problems still lie in the government’s implementation of the law and the country’s difficulty in attaining food security. He says this development is not necessarily indicative of a fundamental flaw of the rice tariffication law. 

"If you compare it to the domestic production of China, probably they’re more efficient, while ours, of course, has to catch up. Domestic sourcing natin is supposedly going to improve next year,” he said.

"To say that this is a reflection of yung kapalpakan (failure) ng rice tariffication, I don’t think so." 

A study by the United Nations Conference on Trade and Development says that “[h]igh commodity import-dependence may also be associated with poor performance in terms of economic growth and human development.” 

The production cost of palay in the Philippines as of this post is P12.42 per kilogram, while the average farmgate price of palay as of the third week of October 2019 was P15.49 per kilogram according to the Philippine Statistics Authority, meaning that farmers are selling at a loss. 

After the law was passed, economists from the National Economic and Development Authority were reportedly taken by surprise at the drop in domestic rice prices.

Revenues should help farmers

Peña-Reyes said that the Rice Tariffication Law itself should be helping farmers too, but the implementation of that is lacking.

"You’re going to gain revenues there which you should use to subsidize the farmers with. That needs to be implemented more forcefully, but it would be unwise to make a reversal."

He was pointing to the law’s Rice Competitiveness Enhancement Fund, which Sen. Cynthia Villar at a hearing in August blasted the DA and the DBM for what she said was poor management of the long-delayed fund, which only rolled out in Isabela towards the end of October.

A separate fund, the Rice Farmer Financial Assistance program, also supposedly focuses on rice farmers negatively affected by the law. 

"You also have to make sure that you support people who need it," Peña-Reyes said. "Through tariffs you’re able to raise revenue. From that revenue dapat sinusuportahan mo yung farmer [at] may subsidy."

Both the Department of Agriculture and the Department of Finance in August promised they would soon roll out cash transfers through the Survival and Recovery program for farmers to ease the effects of the plummeting prices of rice domestically. The program was originally intended for agricultural households in calamity-affected areas, but was expanded for these farmers.

Political crop

“The law holistically insults us Filipinos as a people. Rice is our staple food, our cultural heritage and historical people’s struggle were based on its cultivation and production, but the law transforms us into food import-dependents,” Pamalakaya national chairperson Fernando Hicap said in a press statement.

"Filipinos are known in the world as a rice-producing people, thus, everyone should realize that this is a desecration of the very meaning of being Filipino."

Although rice is considered a staple in the country, it is a highly political commodity. The Philippine rice sector has long been at the forefront of the administration’s agricultural policies. 

"Staple food natin yung rice," Peña-Reyes echoes. "If you take a look at the budget of the typical Filipino household, ano ba yung pinagagastuhan nila (What do they spend on)? It’s really food, and much of what they consume is rice. Malaking part siya ng (It's a big part of the) food basket ng mga Filipino.”

However, Peña-Reyes cited countries like South Korea and Singapore who are very much food secure despite being import-dependent. For him, one factor as well is the fixation on rice. "It’s not just rice that we should be focusing on," he said.

"We want also [for] our farmers to diversify into other crops that would lead them to higher income."

Self-sufficiency? 

“We’re narrowly focused on rice, and we think sobrang sama nun na (it's really bad that) we’re importing a staple product,” he explained. “We’re not agronomically endowed to produce rice as much as Thailand and Vietnam do. They have the mighty Mekong River to serve as a natural source of irrigation. We do not have that."

"What we’re really more concerned about is a broader goal, which is food security,” he added.

In signing the law, President Rodrigo Duterte himself acknowledged the existing need “to improve [the] availability of rice in the country, to prevent artificial rice shortage, reduce the prices of rice in the market, and curtail the prevalence of corruption and cartel domination in the rice industry.”

Estavillo says this hasn’t been enough. 

“When rice sources are supposed to be within the country, [Duterte’s] policies made this distant and even at the discretion of foreign traders colluding with local big traders, who will eventually dictate supply and prices in the domestic market,” she said. “This dominance will hammer consumers, while displacing the rice-producing sectors in the country.”

But of the country’s new status as the top importer of rice in the world, Pena-Reyes echoes what he says economists have long been saying: “No, it doesn’t mean anything. It’s not a bad thing. So what kung net importer tayo? It would be misguided if we suddenly do a reversal on the tariffs dahil maraming pressure.” 

(It would be misguided if we suddenly do a reversal on the tariffs because of pressure)

“Ano yung magandang nangyari? [You get a] stable supply of rice. [But] I think there’s one thing lacking there: We generate revenues from tariffs, [so] why don’t you help the farmers?”

EXPLAINER IMPORT-DEPENDENCE RICE LIBERALIZATION RICE TARIFFICATION
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