Agri reality check

Here are the promises for agriculture and food security that presumptive President Ferdinand “Bongbong” Marcos Jr. made during the campaign:

1. He vowed to bring down the price of rice to P20-P30 per kilo using these options: (1) subsidizing the price; (2) having the Department of Agriculture and National Food Authority (NFA) procure rice from local farmers at higher and more competitive prices to deter rice cartels from controlling supply and demand, with local governments acting as middlemen in the procurement of rice harvests of local farmers; and, (3) amending the Rice Tariffication Law to stop dependency on high rice imports.

2. He promised to halt rice imports once the Philippines becomes self-sufficient in producing rice.

3. He said he would establish government-owned storage facilities where farmers could stock their harvests.

4. He promised to lower the cost of fertilizer, by providing assistance to local farmers through loans with feasible terms.

5. He said he would keep local farmers updated on innovations and technological advances that would increase their yields.

6. He vowed to help backyard farmers via discount in buying commercial feeds for poultry, swine and fish.

7. While giving a discount to backyard farmers for commercial feeds, he also promised to help producers of commercial feeds by ensuring that all the raw materials used to make feeds will go down. “Our dependence on imported ingredients for our local animal feed production is one of the reasons why the price of pork products remains high in the country. Reducing or eliminating this would ultimately lead to reduced farm-gate prices,” he said in a news release.

8. Following a suggestion by presumptive Vice President Sara Duterte, he said he would mobilize local governments and barangays as watchdogs to implement a farm-gate price in every town or city.

Under scrutiny

Here are some inputs from experts as picked up by various media on these proposals:

1. Albay Rep. Joey Salceda said that the only way to bring down prices of rice to cap at P20 to P30 is to import from Vietnam, but that would be detrimental instead of beneficial to local farmers. “You can bring it down to P20, but you will kill 3.4 million rice farmers,” Salceda said.

2. Economist Cielito Habito said this proposal would further lower the farm-gate palay prices to the detriment instead of the benefit of farmers. “His promised P20 rice price thus implies a farm-gate palay price of about P10 per kilo—well below the P12 to P15 farmers cite as their production cost,” Habito said in his Inquirer column. (Note that Agriculture Secretary William Dar had stated that farm-gate price of palay today is at P19 per kilo.) Habito pointed out, “[Marcos Jr.] may not know that as a rule of thumb, the farm-gate price of unmilled palay is about half the retail price of milled rice, given milling recovery efficiency, and costs of milling, transport and logistics through the supply chain.”

3. Finance expert Zyza Nadine Suzara said this proposal would lead to the government going back to a previous government business model “whereby it will buy buffer stocks of rice at prevailing market prices and then sell them at a much lower cost.” This will require additional subsidies so that the NFA can import stocks of rice. In order to afford such subsidies, the government would have to either collect higher taxes or incur additional debt, “which in the end, taxpayers also have to pay for.” She noted that another consequence of this proposal is that it would open up opportunities for leakage and corruption, calling it “a recipe for greater fiscal disaster.”

4. Economics professor Emy Ruth Gianan called it a “counterproductive policy” that would further hurt farmers. “They would either be forced to produce more than their capacity, which is not possible given limited agricultural technology and support for most of our farmers, or would be selling rice at a loss,” she said, emphasizing that this would not benefit the public in the long term as it is more supportive of imports as opposed to heavily investing in the rice industry’s development.

Meanwhile, Dar said he would pitch a P2.5-trillion 10-year National Agriculture and Fisheries Modernization and Industrialization Plan (Nafmip) to help improve farm productivity. Nafmip targets to have a P250-billion budget annually. Yet according to the Philippine Statistics Authority, the Philippines’ overall agricultural output shrank by an annual 0.3 percent by value in the first quarter of 2022, due to a decline in fisheries, livestock and crop production—already “a slight improvement “ from the 3.4-percent contraction in the first quarter of 2021. Crops, livestock and fisheries all posted declines in the value of production. Quarter on quarter, farm output worsened from the 0.5-percent growth seen in the last three months of 2021. Agriculture usually contributes around a tenth of gross domestic product.

If Marcos Jr. is to succeed in achieving a truly remarkable and lasting legacy in this department, he will have to study well how to approach agriculture and food security, relying on real experts —not just imaginative communicators or opportunist posers. The new administration has its work cut out for them for the nation to achieve a true Golden Era, hopefully an era of real value and not just fool’s gold. INQ