Win-win solution for rice import liberalization
On Oct. 24, we found out from Agriculture Undersecretary Segfredo Serrano that the low 35-percent rice tariff can be raised.
This opens up a win-win solution for rice import liberalization.
Eliminating quantitative restrictions with a 70 percent tariff and reducing tariffs with a new roadmap is the way to go.
Dr. Flordeliza Bordey in her book, Competitiveness of Philippine Rice in Asia, stated: “Rice produced in Nueva Ecija irrigated systems cannot compete in Manila wholesale markets with imported rice from Vietnam, Thailand, or India, even with a 35-percent tariff. A 75-percent tariff would be needed to ensure competitiveness.”
The majority of our 2.4 million rice farmers will be mired in more poverty with a 35 percent tariff.
In my Oct. 20 column, I stated; “Of course, tarrification is preferred over quantitative restrictions. But if 35 percent is the only level acceptable to WTO members, we must be given at least two years to prepare for this low rate.”
The win-win solution is provided by Cielito Habito in his Oct. 21 Inquirer column: “Tarrifying our rice QRs, and phasing down the tariffs through time would push the government to finally do things right, until our production cost approaches that of our neighbors.”
Correct tariff
The current 35 percent tariff with quantitative restrictions should now be changed to 70 percent tariff without restrictions.
Our rice farmers deserve no less, because they have been deprived of support measures that other governments have given their own rice farmers.
On Oct. 26, the Department of Agriculture (DA) gave me a rice roadmap done by the previous administration.
They said they are currently changing this significantly.
This is welcome.
Throughout all these years, there has never been a detailed site-specific rice plan and budget.
We need a combination of economists and managers to help formulate and implement this roadmap.
There is a saying that we lose sight of the forest when we look only at the trees.
The economists can see most clearly the forest, but they must also work with managers. These managers should have a detailed knowledge of what trees should be left alone because they are strong enough, what trees need help and the identified assistance with the best cost-benefit ratios, and what trees should be uprooted to give way for better alternatives.
The same paradigm should be used in addressing rice.
Areas with no rice comparative advantage should be planted to other crops. The lost rice yield will be made up through the optimal government cost-effective interventions in the remaining areas
In a study I previously conducted, for every peso spent, restoration and repair of irrigation has five times the benefit of new irrigation.
Furthermore, the use of hybrid and certified seeds has 10 times the benefit of restored and repaired irrigation.
With a very limited budget, right seeds appear to be generally much more cost efficient than irrigation.
But the rice roadmap now being revised does not have this kind of analysis, nor the necessary site-specific plans and budgets.
Management perspective
When the Philippines implemented too rapid agriculture import liberalization, partly because of economists who did not consider the necessity of effective management implementation, countless Filipino farmers and fisherfolk suffered.
We cannot let this happen again.
We must now work double-time for the correct tariff and follow this up with phased tariff reductions backed by a credible roadmap.
The government, with the combined help of public and private economists and managers, can then finally give the farmers what they have long deserved.
