Monday, November 19, 2018
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Commentary

Averting the 35% rice tariff crisis

At the recommended 35-percent rice tariff,  our farmers in 53 provinces will not survive. This is because they have an average yield of less than 4 tons per hectare. The government must act now, after years of neglecting rice farmers’ needs.

Even the highest-yielding rice province of Nueva Ecija will be in trouble. In the article, “Can Philippine rice compete globally?” Flor de Liza, et al. state: “Rice production in Nueva Ecija irrigation systems cannot compete in Manila wholesale markets with imported rice from Vietnam, Thailand and India, even with the 35-percent tariff. A 75-percent tariff will be needed to ensure competitiveness ….Farmers will need to reduce their cost of production from P12.41/kg to P6.97/kg to maintain profit margins. Consider the table below:

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There is both danger and opportunity in this. The danger is that a 35-percent tariff is being imposed because of our Asean commitment,  when a 75-percent rate is needed. The opportunity is we can still compete by raising yield and cutting production cost.

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Sen. Cynthia Villar, chair of the Senate committee on agriculture and food, earlier said: “The government should provide assistance to rice farmers, particularly in mechanization and in acquiring high-yielding seeds.”

But will the government provide the necessary assistance this time? When the Philippines agreed to the rapid tariff reduction of agriculture tariffs in the World Trade Organization, our government promised our farmers competitiveness-enhancement measures, such as mechanization, high-yielding seeds, technology assistance and agriculture support services. They were told their production would increase, jobs created and farmer incomes improved. Because the promises were not fulfilled, the opposite happened.  Poverty worsened. Unless Villar’s direction is implemented, the result may well be massive unrest and even violence.

At the Aug. 4 Management Association of the Philippines (MAP) agriculture forum, a participant commented that the speakers advocating immediate 35-percent rice tariffication certainly  knew the rice industry. An Alyansa Agrikultura leader asked, “but do they know the farmers?”

I remember a city-bred activist in the late 1980s who asked a farmer: “Why are you so slow?” The farmer responded: “You are like a bird in the  sky, and you fly very fast. I am like a fish in the river and I swim very slow. But before you talk to me, you must swim with me. This way, you will understand the currents and dangers I face in the river. That is the only way we can jointly understand the problem and find the best solutions.”

In the same forum, Leo Gonzales (0917 8344802) said farmer dialogues with proper analytics should be employed. He will expound on this in the Oct. 30 Asia Rice Foundation Forum on the National Rice Roadmap.

Gonzales said these analytics should be done on a provincial level. The government can then identify the proper mix of government support for farmers. Previously, I showed that investing  P12,000 in hybrid seeds in two hectares can produce more than spending P900,000 in newly irrigated  one hectare. This cost-benefit approach should be used in allocating limited funds for the mix of different proposed measures.

In all of this, discussions with the farmers should take place with the proper analytics. The provincial governor should take  full responsibility for discarding a traditional Manila-determined universal mix of measures for all provinces, which has failed us so many times. Only then can we successfully avert a serious 35-percent rice tariff crisis.

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TAGS: rice production, rice tariff
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