NEDA cites ways to make rice tarrification work

 

 

By Rose de la Cruz

 

A day after newspapers splashed news about the Philippines being the biggest rice importer in the world, the National Economic and Development Authority talks about ways to reduce quantitative restrictions on the staple to enable more rice to enter the country.

 

Touted in decades past as the rice exporter of the world—following successes made by the International Rice Research Institute and the pro-farmer friendly policies and subsidies in the Marcos era—the country has been steadily increasing (albeit steeply each year) the volume of rice that it would buy from neighbors in Asia and even from far countries.

 

Through its recently-passed rice tarrifiction law, which made conditions more restrictive to domestic farmers (but heydays for importers and traders), the NEDA wants to put more schemes in place to make the tarrification law work to the detriment of the farmers (whose requested safety nets have all been forgotten by the government).

 

In a speech at the 11th World Rice Conference Philippine Session, NEDA Undersecretary for Policy and Planning Rosemarie Edillon, said that the old protectionist policies and the programs associated with it did benefit some farmers, but failed to increase production and has the Philippine rice industry uncompetitive.

 

The adoption of high-yield seed technology is low and about half of the farms are not yet mechanized. The level of mechanization in the Philippines for rice and corn was at 2.31 horsepower (hp) per hectare (2011), much lower compared to Thailand at 4.2 hp/ha (2009) and Japan (with farms being highly mechanized) at 18.87 hp/ha (2011), she said.

 

She said agricultural employment has also been on a decline from 11.84 million in 2013 to 10.26 million in 2017. “Our own study points to several demand and supply push pull factors. Among the demand push factors are the low and unstable farm incomes, due to volatility in geoclimatic conditions; lack of access to post-harvest facilities and diminishing farm size.

 

The pull from the non-agricultural sector, she added, has also increased agricultural wages, making it unaffordable to small landowners. “On the supply side, we find that the younger generation are not interested in taking up farming as a means of livelihood, let alone, in pursuing it as a career. The impression that is unglamorous and backbreaking job persists, as the song goes.

 

Government’s heavy investment in human capital development particularly among low-income households will increase their employability, meaning that they do not need to look for work in agriculture, the employer of last resort.


From 2000 to 2018, the average rice self-sufficiency ratio is only about 90 percent, meaning that domestic production in unable to meet the demand for rice, which continues to grow along with the rising population. “Our calculations based on the Philippines Statistics Authority’s population projection show that the country’s rice requirement will reach 11.9 million metric tons for 2019,” Edilon said.

When the Rice Tariffication Law (RTL) was enacted early this year, because of the strong push of President Duterte, some said ‘It’s about time’. But as with any reform, it gets worse even before it gets better. And at this point, we need to build a constituency for this reform. We need to make sure that a lot more benefits while ensuring that losers are adequately compensated, she stressed.


The RTL includes a safety net, which is the Rice Competitiveness Fund (RCEF). The RCEF is intended to help affected farmers increase their yield, diversify crops, reduce production costs and postharvest losses, and cut marketing cost by as much as PhP1.00 per kg.


Today with the RTL, 101 million Filipinos are enjoying more affordable rice. The price of regular milled rice has dropped by PhP8.9 per kg as of the second week of October 2019. Consequently, we have seen a continuing deceleration in food inflation.


Farmgate prices of palay have gone down faster than the decline in retail prices. The influx of imported rice caused this, but so is the lack of access to efficient and affordable drying facilities. At the same time, there could be unscrupulous traders who are taking advantage of the situations and bidding down farmgate prices unreasonably.


Recently, a Rice Task Force has been constituted composed of the Department of Agriculture and its concerned units, NEDA, the Department of Finance, the Bangko Sentral ng Pilipinas, and the Bureau of Customs. The Philippine Competition Commission was added to look at the possible anti-competitive practices, which is clearly illegal and even unconscionable.



 

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