A day or two after President Rodrigo Roa Duterte ordered the stoppage of rice importation, as expected by many, Duterte now backtracks and says rice importation will proceed. What may are seeing is the penultimate demise of a sector which several decades ago, was the toast of Southeast Asia in terms of production.
I understand why Mr. Duterte wants rice importation to continue– it has the effects of lowering the prices of palay. What our president probably failed to realize is that the commercial price of rice did not even move southward but continues to move Northward. Meaning, per kilo of rice remains practically the same as that period when the law on rice tariffication was still in infancy.
Duterte says he’s willing to subsidize the loss of income of farmers by getting several billions from his own funds. Duterte estimates that government would spend close to 3 billion pesos just to subsidize income loss to farmers.
Since Duterte signed RA111203, rice imports had flooded the market. The effects were instantaneous— it forces local farmers to sell their palay for a loss while smuggling of rice goes unhampered. Worse, who benefits from this but the private rice importer who is expected to pay the right taxes to the government so that those taxes would benefit the agricultural sector.
Haven’t we learned? Tariffication is good only if we can secure prompt and accurate collection of tariff duties. Without an effective collection system, government cannot really ensure that expected target revenues are attainable.
What tariffication really does is legalize rice importation something which benefits the importer, not the local rice grower. Before, the Department of Agriculture only issues a limited number of import permits. Now, the floodgates of imported rice are now open. This will probably lessen smuggling activities since it is not anymore illegal to import rice but the same thing is happening right now at Customs. More importers are paying less tariff taxes to government since they have their solid contacts inside the bureau.
I ask our President–sir, what happens now to our farmers?
The problem that I see is the absence of a safety net mechanism in the law. The sector should have been prepared and thoroughly briefed first. Despite years and billions of pesos worth of government subsidies and support given to the sector, the agricultural sector remains underdeveloped because it is riddled by graft and corruption. Modern equipment which could have served their great purpose of modernizing the sector remain inadequate and unresponsive to the needs of field workers and farmers. Supply chain management which could have allowed fresh produce from the fields to the markets is non-existent.
What would be a difference now with the new law? Nothing except that government had allowed more competition against the lowly Filipino farmer family who remains one of the poorest if not the poorest segment of the Filipino population.
With future losses in the horizon, the lowly farmer entrepreneur does not have any choice but to abandon his profession and possibly turn his farm into something else or sell it outright to those willing to assume tremendous risks in agricultural production.