Rice crisis in the offing as WTO removes restrictions on rice imports – farmers’ group

By INA ALLECO R. SILVERIO
Bulatlat.com

MANILA — The Kilusang Magbubukid ng Pilipinas warned that the Philippines risks going through a rice crisis as the Benigno Aquino III administration is set to open the floodgates to bigger amounts of rice imports.

June 30 marks the end of the quantitative restrictions (QRs) the World Trade Organization (WTO) has allowed the Philippines to “enjoy” since June 2006. The QRs limits the volume of rice that the government imports annually, protecting the local market from the possible flood of imported rice. After the date, the Philippines will again be forced to comply with its obligations under the WTO, among them importing a set amount of imports of agricultural products including rice.

Members of the KMP and the Bagong Alyansang Makabayan (BAYAN) took to the streets in protest of the WTO and said that the Philippines should junk its membership to the said US-dominated global organization. According to reports, the Aquino government sought the extension, but dismally failed to secure it because of opposition from the US.

KMP spokesman Antonio Flores said the Aquino government’s failure to secure an extension of the QRs makes it all the more imperative for the Philippines to pull-out from the WTO.

“The effects of full-scale rice trade liberalization will devastate Filipino farmers and kill the local rice industry,” he said. He pointed out that the removal of the QRs on rice will seriously undermine the country’s economic independence that’s already severely crippled as it is.

“The local rice industry and Filipino farmers will be at the mercy of the WTO. The Aquino government is not exercising any authority or will to regulate and control the influx of imported rice in the local market. The Aquino government continues to boast that the country has had a bountiful harvest in the last months, but the fact is we are all facing the threat of a real rice crisis. With a zero-tariff regime, monopoly pricing, rice price manipulation and speculation will be the name of the game. We anticipate the worsening of land-grabbing, land-use conversion, rice import dependency, hunger and poverty,” Flores said.

The Philippine government wants the protectionist policy extended for three years or until 2015. It filed the request with the WTO on Nov. 18, 2011. During the negotiations for extending the QR on to 2012, the Philippines agreed to increase its minimum access volume (MAV) for rice to 350,000 metric tons (MT) as a concession.

The WTO requires countries that enrolled their sensitive agricultural products under its “Special Treatment” clause to import minimum quantities of the product through the MAV. Countries are allowed 10 years from the WTO’s implementation to prepare the specific agriculture sector for eventual liberalization by replacing QRs with tariffs.

The United States, in the meantime, stood against the Philippines’ petition to the WTO. It used the excuse that the Department of Agriculture’s Administrative Order 22 (AO 22) poses a threat against its own meat exports and demanded that it be rescinded. The DA’s AO 22 set rules and regulations on the handling of frozen and chilled meat and meat products in order to better ensure quality and safety.

“The US’ opposition on our bid to extend the QRs on rice betrays US arrogance. The US throws its weight around as an influential member of the WTO, and there is no way that the Philippines can get fair treatment or deals in the WTO,” Flores insisted.

The KMP also called on the Department of Agriculture (DA) and the National Food Authority (NFA) to increase the farm-gate prices of palay (unhusked rice) to P20 ($ 0.48) per kilo from the current NFA buying price of P17 ($0.40) per kilo.

Road map to rice insufficiency

In the meantime, the alliance Bantay Bigas said that as long as the country’s agriculture remains under the WTO, the government’s rice self sufficiency target is “nothing but hype and propaganda”.

The group’s spokesperson Lita Mariano said Agriculture Secretary Prospero Alcala has long been attempting to convince the public that the lifting of the QRs can actually be a good thing and that there is no need for renegotiations. The truth is, if President Aquino is really serious with his rice self-sufficiency vision for the country, his administration should negotiate for unconditional retention of our rice QRs,” Mariano said.

The Philippine government is currently negotiating with WTO member countries for extension of the Philippines’ request for extension of the retention of the rice QRs. Information gathered by Bantay Bigas reveal that country-specific concessions (CSC) under the minimum access volume (MAV) for rice under the WTO has reached 1 million metric tons (MT).

According to Mariano, this is the third time the country has sought for retention of its rice QRs. The agreement for the first Special Treatment was given a MAV of 119,460 MT and ending with 238,940 MT in 2005.

Another extension of the Special Treatment was allowed with MAV reaching 350,000 MT that is scheduled to end this June. The national government, through the DA, said that in the next negotiation, it will no longer push for the third Special Treatment. They believe that the concessions would be very high, too costly for the Philippines to comply with, specifically for other agricultural products such as dairy and poultry.

“The US has consistently used its bullying tactics to undermine any country that attempts to threaten their colonial stature. Countries like the Philippines endowed with rich agricultural resources will never be allowed to develop its own local agriculture,” Mariano said.

Mariano, however, declared support for Alcala’s statement that the Aquino government will not succumb to the US maneuverings to repeal AO No. 22, and said that the official should remain firm on this point.

“The government should have a back-up plan. It should finally consider our calls for taking the country’s agriculture out of the WTO. Staying in the WTO only compromises the country’s food self-sufficiency. Any program for rice self-sufficiency cannot be realized completely and just remain a pipe dream under an unfair liberalized trading regime with developed countries who continue to subsidize their agriculture even as they demand underdeveloped countries like the Philippines to liberalize their agriculture”, she said.

The DA has announced that the road to rice self-sufficiency by 2013 will be achieved through its Food Staples Self-Sufficiency (FSSS) Road Map.

“This is a road that would take us to nowhere because there is no concrete plan and program that would carry on improvement of agricultural productivity. For one, we have a measly budget for the rice program that only allots three percent for rice and 0.34 percent for palay of the total national budget,” she said.

Bantay Bigas called for the implementation of the Rice Industry Development Act (RIDA) still pending in Congress. It is also pushing for the implementation of a genuine agrarian reform through the Genuine Agrarian Reform Bill (GARB) to replace the Comprehensive Agrarian Reform Program extension with reforms (Carper) which, it said, is more pro-landlord than pro-farmer.

Money for the IMF, no money for the local rice industry

In a related development, Bantay Bigas held a protest in front of the DA and demanded that the government provide rice subsidies for Filipino consumers and increase the budget of the NFA for palay procurement from the country’s local rice producers.

Mariano also criticized the government’s move to lend $1 billion to the International Monetary Fund (IMF) as it denied its strategic government agencies such as the DA and the Department of Agrarian Reform (DAR) sufficient budget for effective implementation of their programs. She said at an exchange rate of P42.00 to the US$1, P42 billion could have bought 2.53 million metric tons of palay bought at P17.00 / kilo or 53.8 million sacks of rice subsidized at P16/kilo and sold to poor Filipinos.

NFA Employees’ Association National President Roman Sanchez said the agency needs at least P5-billion ($119 million) to fulfill its mandate of procuring 10-percent of local palay production and process it into rice for infusion to the local market to make affordable rice available to Filipino consumers especially the millions of poor farmers that produced the country’s primary staple.”

In 2011, the government originally did not intend to provide a single centavo to the NFA but was only forced to allocate P2-billion ($47.6-m) that later on became P4-billion ($95.2 million) upon pressure from farmers and concerned sectors. It remains bent on privatizing the functions of the NFA, including its role of selling commercial rice at lower prices.