Rice
FIRST PERSON - Alex Magno (The Philippine Star) - November 23, 2019 - 12:00am

Earlier in the week, some news outlets reported that President Duterte ordered further rice importation suspended.

The Department of Agriculture unceremoniously suspended a scheduled press conference until the matter is cleared. The Agriculture Secretary subsequently announced there would be no suspension in importation although the process might be tightened.

To be sure, the President is under great political pressure from farmers’ groups complaining about how low palay prices have dropped since we shifted to an open trading regime for the basic staple. That is an expected outcome, one to be addressed through public buying programs and other direct assistance to the farmers from the money raised from tariff revenues on rice imports.

Lest we forget, the shift to a tariff regime for rice was driven by the shortages we experienced last year when rice importation continued to be a government monopoly. The rice shortages kicked up the price for rice. Eventually, they kicked up the inflation rate to really intolerable levels.

Experts have clamored for decades to end the inefficient and vulnerable system of quantitative restrictions on rice importation. It took the convergence of shortages and inflation last year to supply the political conditions to finally get rice tariffication done.

A truly revolutionary piece of legislation was finally passed, with the populists kicking and squirming on the sidelines. Free rice trading will give us security of supply. Revenues raised from tariffs, in turn, will enable us to assist our farmers modernize our farm systems to the tune of over P10 billion a year.

Passage of the rice tariffication law had immediate results. It brought down the price of the commodity and hence the inflation rate. It also opened the floodgates of rice importation that, in turn, influenced palay pricing downward.

The answer to the problem does not lie in suspending rice imports. Even the President of the Republic cannot prevent the application of the law. Doing so might be a popular gesture; but cannot be legal.

What the President can do is ask Congress for supplemental funding to support a public palay procurement program. Or, by some persuasion, local governments may be encouraged to buy rice from the farmers, using the commodity in lieu of yearend bonuses.

All these will involve subsidies of some sort to cover the dislocation during the transition. That is tolerable.

The Foundation for Economic Freedom, a group of the country’s best economists, put the issue most sharply. If rice importation is abruptly suspended, that will reward only the rice hoarders whose warehouses are now filled to the brim as they await a more favorable price to bring windfall profits.

That favorable price will kick up inflation and multiply our people’s miseries. It will only bring us back to the preexisting condition where rice was expensive and the farmers were poor.

Cauldron

The Senate review of the 2020 national budget allowed Sen. Franklin Drilon ample opportunity to grandstand.

Last week, he judged the infrastructure modernization program a “dismal failure.” The facts quickly calmed his outrage.

 Then Drilon shifted his attention to the Philippine Sports Commission, questioning how the facilities at New Clark City might be recouped. If the same questions were asked 80 years ago, the Rizal Memorial Coliseum might not have been built. To this day, the magnificent edifice is a source of national pride even if it is unused most days of the year.

The senator narrowed his focus to the cauldron that he claims cost P50 million. He raised the usual facile comparisons regarding how many classrooms might be built with that amount.

But he did not raise the most important comparison. When Singapore hosted the South East Asian Games the last time it was held, they spent the equivalent of P65 million on the cauldron. The city state also spent the equivalent of P15 billion in hosting the 2015 Games.

We could have scrounged around for any old batya, stuck in on a used electric pole and called that the cauldron. But as regards the track, the pool and, yes, the cauldron, there are Olympic standards to be met.

When we hosted the APEC, the Noynoy administration asked for a budget of P10 billion even if that expense did not produce any lasting edifice in its wake. No one whined about that as Drilon now whines about the P6 billion we invested in the Games. We have an obligation to the international community to deliver the best in our hosting.

For P6 billion, we have managed to rehab the Rizal Memorial and the Ultra. We built a whole new sports complex at Clark that will serve a projected Philippine Sports Academy. It will also anchor the development of a new government center in that area.

In the face of all the intrigue Drilon spewed regarding the preparations for the Games, House Speaker Alan Peter Cayetano set aside protocol and chose to appear at the Senate as a resource person to answer all questions. Several deputy speakers accompanied him.

It was Drilon, we will recall, who moved to cut the SEA Games budget from the original P7.5 billion to just P5 billion. The organizing committee had to raise P1 billion from the private sector to enable us to make suitable preparations. Now, on the eve of the Games, Drilon was casting doubt about the integrity of the preparations.

With the delay in the passage of the 2019 budget, the SEA Games money was also delayed. Notwithstanding, the organizing committee did a heroic job of getting the venues ready ahead of the Games.

DEPARTMENT OF AGRICULTURE
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