President Rodrigo Duterte ordered the National Food Authority to purchase palay (unhusked rice) from farmers at a reasonable price. The NFA, however, only maintains its current buffer stock level of 15 to 30 days based on a daily national rice consumption of 32,593 metric tons per day. Even if the agency buys the maximum volume of 978,000 metric tons of rice from local farmers, it would be equivalent to roughly 11 percent of the 8.4 million metric tons of rice produced locally in 2018.
The Department of Agriculture, meanwhile, plans to impose non-tariff measures, such as implementing sanitary and phytosanitary measures. That, of course, would not stop the influx of cheaper, subsidized rice from neighboring countries, estimated at about three million metric tons for the whole 2019.
The zero-interest P15,000 loan payable for eight years would further push our rice farmers deeper in debt. At P7 to P10 per kilo of palay, most of our rice farmers reaped debt instead of rice.
Even the P10-billion Rice Competitiveness Enhancement Fund (RCEF) does not have an allocation for direct subsidy for rice farmers. The law states that 50 percent goes to Philippine Center for Postharvest Development and Mechanization for the purchase of farm equipment; 30 percent to the Philippine Rice Research Institute, 10 percent to the Agricultural Training Institute (ATI)/Technical Education and Skills Development Authority (TESDA) and another 10 percent to the Land Bank of the Philippines (LBP) and Development Bank of the Philippines (DBP) for loans.
Nobody from the Duterte administration wants to admit that the Republic Act 11203, which has liberalized rice importation, is the culprit behind the miserable state of our farmers right now. Senator Cynthia Villar, main author of the law, even has the gall to blame every government agency but herself.
Farmers’ group Kilusang Magbubukid ng Pilipinas has long warned that removing the quantitative restrictions on imported rice would seal the death of the country’s rice industry. Not only it has caused further misery to our farmers, it has not resulted in lower prices. As of second week of August, the average retail price of well milled rice was pegged at P42.71 per kilo.
Since the country entered the World Trade Organization (WTO) and started trade liberalization in agriculture, the share of agriculture in the Philippine economy has declined, according to independent think tank Ibon Foundation. Whatever safety nets promised purportedly to protect the local economy were mere empty rhetoric. In fact, agricultural trade deficit ballooned from $287 million in 1994 to over $6 billion in 2015. With rice liberalization, the agricultural trade deficit would surely worsen.
To abate the crisis, the logical step would be to repeal Republic Act 11203.
The next step would be to provide direct subsidy to farmers in the form of irrigation services, farm inputs support, post-harvest facilities, among others, to lower the cost of production. A 2016 Philrice study reveals that the Philippines has higher production cost at P12.41 per kilo compared with Thailand (P8.85), Vietnam (P6.53) and Indonesia (P8.87).
The more comprehensive solutions are embodied in Makabayan bloc’s House Bill No. 555 or the Genuine Agrarian Reform Bill and House Bill 8512 or the Rice Industry Development Act. The twin bills seek to invest in the country’s agriculture, with the view of having food self-sufficiency.