Dream on

If there is indeed more than enough rice stocks in our country, pray tell, why do I have to pay as much as P47 per kilo of well-milled rice? On the other hand, NFA rice, or rice sold by the state-run National Food Authority, sells not lower than P30 per kilo. If we follow the law of supply and demand, then prices of rice would not cost that much, whether it is well-milled, regular-milled or “broken” rice.

In fact, I gathered, the current prices of rice in the domestic markets have been significantly higher than those in other rice-producing countries like the Philippines. The Department of Agriculture (DA) and the NFA, however, are both in state of denial and staunchly refute it.

Naturally, this could be expected from government officials who are supposed to be in charge of keeping stable the price and supply of rice being a politically sensitive commodity.  

Unfortunately, DA Secretary Proceso Alcala and NFA administrator Orlan Calayag are both embroiled deeply in controversies in their respective offices. And much of their troubles in office have nothing even to do with the high prices of rice. Or is it?

Calayag’s woes extend all the way to questions over his dual citizenship. President Benigno “Noy” Aquino III appointed him as NFA chief to serve the unexpired term of his predecessor Angelito Banayo beginning July 1,2013 and ending on June 30,2014.

Calayag’s dual citizen status came out in the open after lawyer Argee Guevarra denounced his appointment as NFA chief, noting that the NFA charter allowed only natural-born Filipinos to lead the agency.

The embattled NFA chief, however, refuted this. He said he already renounced his US citizenship. Executive Secretary Paquito “Jojo” Ochoa Jr., who heads the screening committee for all presidential appointees, vouched for the citizenship status and qualifications of Calayag.

Aside from controversies hounding both the DA Secretary and the NFA chief are agricultural crop damages, especially rice fields ready for harvest destroyed by the series of typhoons in the country. Obviously, it has disrupted the supply chain as manifested by high prices of rice.

But why is it there is so much hemming and hawing on whether or not to allow importations to beef up rice stocks?

Threatened by lawsuits, Customs Commissioner Rufino Biazon disclosed he is seeking a legal opinion from the Department of Justice on whether a permit is required in the importation of rice. At the same time, the Customs chief urged the agriculture department to come up with a clear-cut policy on rice importations because the quantitative restrictions have been lifted.

This is because the government has refused to adopt a more open policy toward rice importation despite being a signatory to the Uruguay round of multilateral trade negotiations of the World Trade Organization (WTO).

The fact is, the terms liberalization and importation have been demonized to bogeyman status that sticking to protectionist policies is the popular thing to do.

But the administration of President Aquino is in a very unique situation with more than three years left in its term of office. Despite the raging pork barrel scam controversy, the President is undeniably still enjoying wide base support from majority of Filipinos, including from his allies in Congress.

This means that President Aquino’s hands are not tied to implement long-overdue trade policies that will bolster the country’s position as “Asia’s rising tiger.” The idea of adopting protectionist policies for the agriculture sector stems from the assumption that consumers will be able to enjoy affordable domestic products such as rice while providing gainful employment to local farmers.

The assumption has proven to be off-tangent on both counts – the country’s agricultural sector has remained on the decline, while most Filipinos pay higher prices for local produce, including rice.

According to the National Economic and Development Authority (NEDA), Filipinos at times have to pay twice more for the grain that can be imported at a cheaper price.

What is absolutely imperative for the Aquino administration is not just to liberalize but also to implement fully Republic Act 8178, or the Agricultural Tariffication Act. Enacted in 1996, it seeks to institute policy reform measures for the benefit of local farmers.

RA 8178 mandates that tariffs from imported agricultural products go to the Agricultural Competitiveness Enhancement Fund or ACEF. Revenues from tariffs imposed on imported agricultural products may be plowed back into the domestic sector by way of irrigation, farm-to-market roads, post-harvest equipment and facilities and credit and research and development extension services, among others.

It aims to increase investments in the agriculture sector while reducing corruption where favored importers are given “special permits, exemptions, and privileges” under an importation-prohibitive environment.

The law also provides for a win-win solution by abolishing restrictions on the importation of agricultural products while protecting Filipino firms against unfair trade through the strict implementation of anti-dumping measures.

The President must crack the whip on agencies that have not maximized the provisions of this law for the benefit of local farmers and Filipino consumers. And from a global perspective, obligations under the WTO must be respected and a bid for self-sufficiency must not be at the expense of enough stock to ensure stable prices in the market.

That practical stand does not, and must not, be by way of controlling the importation volume while ordinary Filipinos complain of insufficient supply and increasing prices. Neither should it be through restrictions that circumvent existing free trade provisions and put the country’s credibility on the line before the international community.

And yet we aspire to join the ASEAN economic community in 2015? Our bachelor president, 53-year-old P-Noy who lives at Bahay Pangarap across the Malacañang Palace,  can only dream on while our government officials could not even decide when to buy or sell rice to our ASEAN neighbors.