Saving the farmers

Rice prices are down – but not down enough, even by the reckoning of agriculture officials themselves, considering the amount of rice imported so far under the “unli” importation made possible under Republic Act 11203, the Rice Tariffication Law.

The imports, however, are enough to pull down palay prices, hitting hard the country’s 2.7 million rice farmers. Multiply that by five – the average family size in this country – and that’s 13.5 million people affected, or more than a tenth of the population. The number could be higher; among low-income agrarian communities, I think the more realistic average family size is seven or eight. So far, I haven’t heard any farmer say he’s not hurting from RA 11203.

Bantay Bigas spokesperson Cathy Estabillo and Danilo Ramos, national president of the Kilusang Magbubukid ng Pilipinas say they aren’t exaggerating: palay prices have plummeted to a record low of P6 per kilo in some areas in Central Luzon, the country’s traditional rice granary – down from the pre-tariffication price of P17 when bought by the National Food Authority (NFA).

The price is so low, Ramos said, that farmers aren’t selling, and therefore have no use for post-harvest services. This, he said, has forced several rice mills to shut down. So farmers aren’t the only ones affected.

The farmers are also saying that they haven’t seen a centavo of the P10 billion released so far since last year for the Rice Competitiveness Enhancement Fund. As the name implies, part of the RCEF is supposed to go directly to farmers as support in the transition to “unli” rice importation. The rest is supposed to go to other support services such as mechanization and the procurement of equipment.

Ramos and Estabillo told “The Chiefs” this week on Cignal TV’s One News that so far, they have seen neither financial nor technical assistance from the RCEF.

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From the start this was one of the biggest concerns over the tariffication law – that the RCEF would go the way of the fertilizer funds that became mired in an election-related corruption scam in 2004, and the lending program under the Agricultural Competitiveness Enhancement Fund in the 1990s.

This time, with rice farmers warning that they are in their death throes, the government rolled out on Sept. 2 the Sure Aid assistance program for farmers tilling less than a hectare of land. Each farmer gets P15,000 under the program.

Estabillo noted that Sure Aid is an acknowledgment that rice tariffication has been a bane to farmers. She presented a breakdown of expenses, showing that per harvest season, farmers spend from P46,230 to about P73,950 per hectare, for a grain yield of 100 cavans (5,000 kilos). The cost of production is from P12 to P14.79 per kilo. How can they sell their palay at P6 to P7?

No one likes doomsday prophets, but it’s truly starting to look like the end of the local rice industry. We will become completely dependent on other countries for our staple.

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William Dar, who became Department of Agriculture (DA) secretary on Aug. 5, ran smack into the twin gargantuan problems of the rice farmers’ crisis and possible African swine fever contagion (now confirmed).

Facing The Chiefs last Monday, Dar gave assurance that the government is moving to provide stop-gap emergency relief to farmers, adopt long-term measures to stabilize rice prices and supply, and make RA 11203 work.

Apart from Sure Aid, the NFA has P7 billion to procure rice from local farmers, with special focus on areas where palay prices have plummeted the most.

Dar said the NFA still has four million bags of imported rice that can be released to flood the market and bring down retail prices.

Thirty local government units have also committed to buy the harvest of local rice farmers. Some local government executives have expressed concern that they might violate government procurement laws. But Dar said LGUs should find “creative” ways of complying with the rules while supporting local rice farmers.

At the same time, the DA is appealing to private traders to release their stocks of rice imported mostly since the start of tariffication, estimated at 2.4 million metric tons.

Dar notes that because rice prices are low, there are commercial traders who are holding on to their imported stocks, apparently waiting for prices to go up, and refusing to add to their inventory by buying from local farmers.

While Dar acknowledges the need for sound business management and profitability, the DA is working with the Philippine Competitiveness Commission to determine if such traders are in fact engaging in hoarding, price manipulation and cartelized business practices.

“Be assured that we will flood the market with imported rice,” Dar said.

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The government is also acting on suggestions to increase rice tariffs to temper the importation.

Former trade undersecretary Ernesto Ordoñez, who now chairs Alyansa Agrikultura, says the current 35 percent tariff can be increased to 70 percent.

The higher tariff can be maintained while local producers adjust to RA 11203 and the RCEF is given time to be felt by the intended beneficiaries.

Dar swears that the P10 billion released so far for the RCEF has been accounted for by the DA. But he acknowledges that it will take time for the benefits to be felt.

He points out that RA 11203 took effect on March 5 this year; the implementing rules were released at the end of June, while the component guidelines and protocols were formulated only in July. Today the government is just starting to bid out contracts for items such as seeds and farm machinery.

“It’s moving,” Dar told us, referring to RA 11203. “Talagang it’s still on time.”

He points out that agricultural development has been “really neglected” over the past 30 years, and now people are in a hurry to make RA 11203 work: “Ngayon nagmamadali sila.”

Dar said some farmers, however, must concede that their ecosystems are truly not conducive to rice farming, so they should consider diversifying to other crops.

I asked if these areas included the Banaue Rice Terraces, which younger generations have been abandoning for many years now. RA 11203 can only further fuel the exodus.

Dar said the DA could take over the terraces – if the farmers are willing to sell their land. The government, he said, would plant pricey artisanal rice, to make the manual labor in the terraced paddies worth it.

More than coaxing a bigger yield from the terraces, however, the government will be serving as custodian of a national heritage.

Like the support for lowland farmers, saving the Rice Terraces will have to happen soon… before it’s too late.