Defend our rice farmers now

by Ernesto M. Ordoñez, Philippine Daily Inquirer, Aug 30, 2019

It’s a crisis when majority of our 2.4 million rice farmers are suffering from the low 35-percent tariff under the rice tariffication law.

At that tariff level, Philippine Rice Research Institute vice president Flordelis Bordey says that 53 (or 65 percent) of our rice producing provinces will not survive. This also translates to 40 percent of our farmers suffering.

Bordey has impressive statistics to show that to survive the 35-percent tariff, the play yield must be at least four tons per hectare. Unfortunately, too many farmers are not achieving this level of productivity. The reason: Lack of necessary support from the government.

What then is an equitable tariff today? It is 70 percent. This will level the price of imported rice with that of the average domestic rice price.

The 35-percent tariff will have too many farmers suffering because they have not been “adequately prepared by the government, after 22 years and three postponements of this anticipated tariff approach.”

Still, we need to implement 35 percent because that is our government’s commitment to the World Trade Organization (WTO). If we do not, worse things will happen.

Our government is trying to help by legislating a P10-billion Rice Enhancement Competitiveness Fund (RCEF), but too little, too late. This initiative should have started years ago to prepare our farmers, not now when the tariff is already in place.

Government officials said the rice retail price would go down by P7 to P10. It has decreased only by P1-P2. They also said farmers would become more competitive. Yes, if they were given the time to prepare. They are now suffering.

A Senate report states that 200,000 rice farmers have stopped planting and that 4,000 rice mills have closed.

Farm-gate wet prices per kilo have decreased from last year’s prices by P4.50 (according to the Philippine Statistics Authority) and by at least P7 (according to the Department of Agriculture). But with harvest time nearing, prices have decreased by P10 (from P21.50 to P11.50) in many areas.

The traders are getting all the benefits, with the consumers practically getting nothing and the farmers losing their livelihood. Farm-gate prices are decreasing from P4 to P10 per kilo. The RCEF is helpful, but miniscule compared to what the farmers are losing.

For every P1 decrease in farm-gate price and at 20 million tons a year, the farmers lose P20 billion.

At this rate, the most conservative P4 estimated price decrease, they lose P80 billion (and P140 billion, if we assume the average P7-price decrease ).

What then must be done? The DA must move quickly, lest dissidence and violence replace disappointment.

The first move is to get a higher temporary tariff.

Fortunately, the WTO has made arrangements for situations such as ours. Our Congress has wisely supported this with the Safeguard Measures Act (RA 8800). Article III of the law states that an agriculture special safeguard (SSG) may be initiated by a private person or the agriculture secretary.

A private sector leader of the Alyansa Agrikultura already wrote an official letter to the agriculture secretary on Aug. 13. He suggested that even without a private sector request, DA should act immediately. This is because the trigger import volume that would allow SSG has already been surpassed (i.e, January to July imports are at 2.3 million tons). The response time in the law is five days. It is now 14 days, and we are still waiting.

The second DA duty is take immediate action to alleviate the plight of the farmers by providing them measures to cope with their lost income. One option is to make arrangements for an entity to buy the palay at a higher price than what traders are dictating today.

The National Food Authority used to do this, but is unable to perform this function now. It is important to have responsible, creatively designed cash transfers so certain outcomes are achieved. If the Pantawid Pamilyang Pilipino Program can do it to help poor children, why not similarly help farmers who are suffering because of previous government inaction?

It is now up to the DA to find solutions to defend our rice farmers from this aberration that is causing so much suffering. We fully support Agriculture Secretary William Dar as he brings new life to a talented but underutilized bureaucracy.