Rice tariffication
Unless action is taken immediately, the impending rice tariffication will end in tragedy. The 13 business groups that urged President Duterte to sign into law the tariffication bill to ensure stable supply have good reasons for advocating tariffication. Management experts from the same groups must now be harnessed to turn around a dangerous situation causing massive suffering for rice farmers to an opportunity for successful rice tariffication.
The devil is in the detail. On Oct. 30, at the Rice Policy Forum of the Asia Rice Foundation, the Alyansa Agricultura (AA) was asked to give its position on rice tariffication. The AA is composed of 42 federations and organizations covering major agriculture sectors. Below is the summarized AA position:
- Tariffication is desirable. But it must be given at the right level, and with appropriate farmer preparation.
- A 35-percent tariff is too low but we must accept it because of an international trade agreement.
- The ideal tariff should be closer to 70 percent. This is the level pointed out by a Philrice study that will enable the rice farmers to survive.
- Therefore, the government must implement emergency measures to help farmers survive the 35-percent tariff.
Let us examine these points. JC Punongbayan wrote in his Dec. 7, 2018, article: “The truth is that we have been putting off rice tariffication for decades. Since the country joined the World Trade Organization (WTO) in 1995, we have committed to put an end to these import tariffs. The government has since postponed compliance with the WTO several times. In 1994, we called for an extension until 2005, then another until 2012, and yet another until 2017.”
This is a total of 22 years for preparing our farmers for tariffication. This has not happened. According to a Philrice study by Flordeliza Bordey, the 35-percent tariff will endanger the livelihood of farmers in 53 out of 82 (or 65 percent) rice producing provinces . They have an average yield below 4 tons a hectare, which is the minimum yield required to survive the 35-percent tariff.
Immediate action must therefore be taken to increase this yield. In his Dec. 1 column, Javier stated: “We have been giving away seeds, fertilizers, and farm equipment all these years with no visible lasting outcomes. Worse, we have been witness to the depressing spectacle of ghost farmers, ghost deliveries, overpricing, and non-existent after sales service for equipment.”
In fact, the addition of other crops to rice for increased farmer income has not taken place. About 82 percent still use the rice monocrop system. Unfortunately, the DA Palayamanan program that promotes additional crops was abolished.
We do not want another repeat situation because of trade liberalization without the property farmer preparation. Rene Ofreneo said that when agriculture trade liberalization was implemented in 1995, macro economic forecasts predicted “annual agriculture value added of P60 billion a year, agricultural net export earnings of P3.2 billion a year, and 500,000 new jobs in the agri sector every year. But instead, agriculture performance from 1995 to the present has been dismal, if not catastrophic—widening net agricultural trade deficits, deepening massive poverty in the countryside, and inflation averaging close to 5 percent a year from 1995 to 2017.”
Turnaround management experts must help the DA with creative plans using organized groups taking advantage of economies of scale in location-specific areas. This is the way to implement rice tariffication successfully, instead of it turning into a great tragedy for rice farmers.
