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Rice tariffication will
displace rice farmers,
worsen food insecurity–
IBON
November 22, 2018
by IBON Foundation
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Rice tariffication and uncontrolled rice imports will displace rice
farmers and worsen food insecurity without solving the problem
of expensive rice, research group IBON said. The government is
using high inflation to justify rice sector liberalization according
to long-standing demands of the World Trade Organization
(WTO) and big foreign agricultural exporters. Domestic
agriculture should be strengthened with ample government
support instead of being prematurely opened up to cheap
foreign government-subsidized imports from abroad, said IBON.
Senate Bill 1998 or the Rice Tariffication Bill, which was approved
by the Philippine Senate on third and final reading recently, is
currently undergoing bicameral deliberation. Government said
that this will protect the rice industry from volatile prices, and
consumers from rising inflation. The measure is also supposed
to earn Php10 billion annually which will be used to fund
development of the local rice industry.
IBON however stressed that uncontrolled rice imports will drive
rice farmers into worse poverty. If the Philippines imports two
million metric tons of palay, for instance, some 500,000 of
around 2.4 million rice farmers will be adversely affected. Even
the government’s own Philippine Institute for Development
Studies (PIDS) projects a 29% decline in rice farmers’ incomes
from a Php4-decrease in palay farm gate prices when rice
tariffication is implemented.
As it is, farmers’ average monthly income of Php6,000 at the
Php21 farmgate price is already far short even of the
government’s understated Php9,064 average poverty threshold
for a family of five. It is also not even one-fourth (23%) of IBON’s
estimated monthly family living wage (FLW) of Php26,026 for a
family of five as of October 2018.
Filipino rice farmers are unproductive and domesticallyproduced rice is unnecessarily expensive because of longstanding government neglect of the agriculture sector. No more
than 5% of the national budget has been given to agriculture over
the last two decades. The Duterte administration does not
correct this and, for instance, the Php49.8 billion 2019
Department of Agriculture (DA) budget it submitted to Congress
in July is just 1.3% of the national budget and even Php862
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in July is just 1.3% of the national budget and even Php862
million less that its cash-based equivalent of Php50.7 billion this
year.
The hyped Php10 billion (US$190 million at current exchange
rates) rice development fund of the Rice Tariffication Bill is too
little and too late, said IBON. This compares unfavorably to rice
industry support given by other rice producers including some
countries the Philippines imports rice from — Vietnam (US$400
million), United States (US$619 million annually), Thailand
(US$2.2-4.4 billion), India (US$12 billion), Japan (US$16 billion),
and China (US$12-37 billion).
IBON also pointed out that there is no guarantee that retail rice
prices will be lower in the long run with unhampered
importation. Relying on rice imports makes the country
vulnerable to higher world market prices as well as to rice
production and export decisions of other countries. In 2008, for
instance, IBON recalled how Vietnam, India and Pakistan
restricted their rice exports amid rising global rice prices.
Thailand also raised the idea of creating a global rice cartel
similar to that for oil exporting countries.
Government’s neoliberal prioritization of food imports and
production of crops for export should be reversed, IBON said.
The Philippine government should instead strengthen the local
rice industry. This begins with free land distribution to all willing
tillers, followed by giving substantial support for rice producers,
and taking control of the market to ensure reasonable prices for
rice and other agricultural produce. ###
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