Crying over rice

Let’s pause awhile from shouting ourselves hoarse over the unsettling action of Bureau of Correction officials of releasing prisoners convicted for heinous crimes due to ignorance or negligence, and something else (think this one over) of the Good Conduct Time Allowance (GCTA) law.

Let’s look at a suffering sector – the farmers – who are feeling the pain of declining prices of palay. But why are the prices going down? Not because, as claimed by another sector – farmer leaders – of the Rice Tariffication Law (RA No. 11203) that was signed into law by President Duterte early this year.

Recent developments tend to show that the aggrieved sector is engaged in an economic sabotage to prove that the government is wrong to implement the tariffication law.

There is nothing wrong with tariffication. The objective of the law is to ensure food security, and make the country’s agricultural sector globally competitive by using tariffs, and stabilize food prices and inflation.

It is admitted though, that since rice importation, under the law, is allowed and uninhibited, the influx of cheap imported rice is threatening local production, resulting in the low price of palay produced by the local farmers. But what they experience is like birthing pains – temporarily, until the gains are experienced.

The law originated from a bill principally authored by Sen. Cynthia A. Villar, chair of the Senate committee on agriculture and food and the committee on government corporations and public enterprises. As she explained to media, she wanted to be sure that the funds provided through tariffication will go directly to the farmers through Philmach (Philippine Center for Postharvest Development and Mechanization), Phil Rice and Landbank, and not through the Department of Agriculture and even the National Food Authority as they could be waylaid as what happened with the budgets for the last 22 years intended to modernize Philippine agriculture and make it competitive with other countries.

The Department of Agriculture under the new leadership of Secretary William D. Dar will surely not want that to happen, but he has also other pressing matters to attend to such as countering the moves of rice hoarders.

This urge to amend or abolish the tariffication law may affect our compliance with the requirements of the World Trade Organization, resulting possibly in the diminution of our coconut and other agricultural exports in the world market. The removal of the WTO Quantitative Restriction, the Philippines’ international commitment for 22 years ago, can no longer be extended because until not we have not come up with a program to make our farmers competitive and have failed in doing so. 

The tariff law puts in a tax of 35% to the landed cost of imported rice. It then goes to the funds to buy seeds and tractors to help farmers increase their yields and be more efficient so that their cost of production will be the same as that of foreign farmers. With the 35% additional tax, the foreign rice will now be higher in price when sold to the customer, making our rice cheaper or competitive.

The issue is just muddled with farmer leaders shouting to high heavens for the tariffication law to be suspended, and that the regulatory functions of the NFA be returned to it. This could not be done anymore even as some farmer leaders claim they know their international commitments and economics.

What propelled these leaders to appear in Senate hearings and air their complaint: the fear of losing benefits they get from the NFA.

Without a doubt these farmer leaders want to draw the public’s attention to the vested interest of the principal author of the law whose family is in real estate development. But then, who is the real estate developer that will build houses in flooded rice areas, except warehouses that will just fill up the rice lands to one meter higher, and build shopping malls? There may be some doing all these, but certainly, no housing company in its right mind will sell houses in flooded areas.

  The bigger problem here is that the farmer leaders supposedly acting in the interest of our farmers do not really represent the sentiments of the farmers, who are the silent majority. What these avowed leaders should be asking is for the creation of certain conditions that benefit the real farmers who hardly make enough to live comfortably. These include removing the condition that they (the farmers) should be accredited by the DA for them to be enrolled in the Rice Competitiveness Enhancement Program (RCEP); they must be provided with their own rice mills complete with farm machineries; that the NFA commits to buy a percentage of what they can produce for buffer stocking; that in addition to free irrigation, they should be given free electricity to irrigate their rain-fed farms with electric- driven shallow well pumps – a process rightfully called “electronation.”

There is now a farmer’s federation that has prepared for rice liberalization as early as 10 years ago. With a grant in aid from the DA they were able to dry run a foodbank to sell directly to the commonwealth market, and organized seedbanks with a network of warehouses in Pangasinan and Zambales that are bird and rat free for the World Food Program as a market. This is KMMMP (Kapisanan ng Magsasaka, Mangingisda at Manggagawa ng Pilipinas) headed by V.L. Sonny Domingo as permanent chairman.

In addition, KMMMP has developed a climate resilient integrated farming system where they plant and harvest everyday covered with crop insurance for its risk management and enrolling 1,000 farm families for modules of 1,000 hectares that can produce 30 tons of rice husk to run their own power plant for agro-industrialization. Domingo, however, said that until now they have not yet obtained any assistance from the government which requires funds to purchase their own rice mill complex for value adding and irrigate their rainfed farms with renewable energy they call “electrigation” and operate their own common service facilities managed by licensed agriculturists and professional managers.

They are being incorporated with a wealth-sharing scheme with the farmers owning majority of the stocks shares for the use of their farms for production and a 30% share of the total produce for the use of their land under an agribusiness approach and programmed farming. Investors’ funds will be paid back in five years’ time and still retain 20% of the agribusiness even after payment, while the aging farmers will be retired with a lifetime pension and replaced by their trained children or relatives to manage their own farms with a monthly salary. If the farmers choose to sell their one- hectare farm that is enrolled, their stock shares will be bought by the project amounting to no less than P1 M per hectare at a minimum.

Several investors offered them funds to export their produce to Africa and the Middle East but PMMMP has refused the offer, hoping that the government will assist them to produce rice for the local market. They claim that they could irrigate as much as 100,000 hectares immediately given the funds at only half the government cost of irrigating rice farms complete with support services such as cheap electricity, tractor pools and food processing facilities.

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