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Filipino rice farmers need support, not liberalization

by IBON Media & Communications

In a statement, National Economic and Development Authority (NEDA) acting secretary Karl Kendrick Chua said: “The Philippines generally does not have a natural comparative advantage in rice production compared with neighbors like Thailand, Vietnam and Myanmar which all have large flat plains, fewer or no typhoons, less history of land inequality, and access to the Mekong River system, which serves as a great source of natural irrigation, as well as lower population growth rates.”

On that basis, NEDA argues that rice liberalization is the logical thing to do and that the Rice Liberalization Law (RLL, or Republic Act 11203) is already benefiting the country. The problem with this argument is that it treats food security like a game that you lose just because you do not have the right starting conditions. That’s a free market-based argument that only has a semblance of sense in economics textbooks.

In the real world, and as proven by the experience of literally every successful developed economy, comparative advantage can and should be modified with government intervention. Chua omits how government neglect and policies like the Rice Liberalization Law (RLL) are what undermine Philippine rice production and domestic agriculture. The Philippines can improve productivity, increase production, and provide enough rice for Filipinos with sufficient government support to rice farmers and the rice sector. The government’s defeatist attitude and blind surrender to market forces is the biggest reason why Philippine rice production and domestic agriculture as a whole remains so backward.

The RLL is captive to that narrow-minded thinking and just makes things worse.

Misplaced praise

NEDA hails the Rice Competitive Enhancement Fund (RCEF), a component of the RLL, which supposedly guarantees Php60 billion pesos from rice importation revenues for six years. RCEF will supposedly help rice farmers to modernize and innovate. This seems to be helping rice farmers.

Instead, RLL is killing the rice industry. Over a year into RLL and because of unrestrained rice importation, palay prices have fallen to as low as Php8-10 per kilo. This is a huge 50% drop from the Php20 per kilo price of palay before the law was passed. Rice farmers have cumulatively lost some Php84.8 billion in earnings in the first full year of implementation or around Php35,328 per rice farmer. Earnings are not enough to pay for the cost of production.

As a result, farmers from Philippine rice granaries such as Isabela, Nueva Ecija, Laguna and Mindanao are already thinking to stop planting rice. At least 3,000 rice mills have already stopped operating.

Farmers were facing worse prospects for selling palay even before the RLL. The government earlier clipped the powers of the National Food Authority (NFA) to influence and support the price of rice in the market by restricting the amount of palay and rice it buys locally .

RCEF claims to enhance farmers’ competitiveness through mechanization, seeds distribution and trainings. However, its coverage is actually limited and can even aggravates farmers’ indebtedness.

RCEF reportedly aims to cover 1.9 million rice farmers listed in the Registry System for Basic Sectors in Agriculture (RSBSA) and Department of Agriculture (DA)-accredited rice cooperatives and associations. This still leaves out at least half a million rice farmers. The Integrated Rural Development Foundation (IRDF) has for instance already estimated that the annual Php10 billion RCEF allocation will not be enough to offset the losses that RLL causes rice farmers, which it computes to be between Php60-Php110 billion.

Loans may also just worsen indebtedness if productivity or earnings do not increase much and if farmers’ expenses are still too high. Loans are too easily eaten up by production costs such as for expensive commercial seeds, fertilizers, pesticides and tools. The government does not make any effort to make these more affordable. Landless farmers may just end up using loans to pay their land rent to landlords.

These are why so many government loan programs have just kept so many farmers in a cycle of debt. The Agricultural Competitiveness Enhancement Fund (ACEF) and the Sugar Industry Development Act (SIDA) also provide rural credit. RCEF and the older ACEF and SIDA reportedly make Php2.1 billion in funds available for easy credit to rice farmers. About Php2.5 billion of ACEF funds were allegedly lost to corruption in 2014. Meanwhile, stakeholders lament that SIDA funds reportedly amounting to some Php2 billion per year since 2015 have so far been underutilized.

Worsening neglect

NEDA’s negativity about the country’s rice industry glosses over the government’s accountability for the agriculture sector’s backwardness because of its long-standing neglect. Government policies on land and food such as the RLL, relying on imported agricultural products, allowing rampant land use conversion, and flawed land reform only worsen the impact of this neglect.

The agriculture sector shed over one million jobs between 2017 to 2019 which is the most jobs lost in a 3-year period in 21 years. The sector’s 2.1% average annual growth in the same period was below its 3.5% average annual growth for 70 years from 1947-2016. Agriculture’s share in gross domestic product (GDP) has fallen to its smallest in Philippine history at 7.8 percent. The agricultural trade deficit in 2018 was also the largest in the country’s history at US$8 billion.

Agriculture is still such a significant part of the economy and these signs of weakness point to how much needs to be done to bolster the sector. And yet, under the Duterte administration, the budget for agriculture and agrarian reform averaged just a measly 3.6% of the total national budget annually from 2017 to 2019. This is even slashed further to just 1.6% in 2021. This means that the government’s capacity to support farmers with facilities, subsidies and other assistance is declining.

Rice farming households are also among those who will not be getting any more cash assistance. Although agricultural production was among the least affected sectors by the pandemic, earnings from rice farming are so poor that many rural families also rely on various odd-jobs in the informal sector which have been adversely affected. Yet the proposed 2021 budget for cash assistance has been reduced to just Php9.9 billion from over Php260 billion under the emergency Bayanihan 1 and Bayanihan 2 laws.

Support our producers

The Philippines’ annual average rice self-sufficiency ratio over the last 30 years was 91% and the country was 93% rice self-sufficient as of 2017. Yet rice can be much cheaper and the country can be fully self-sufficient if only there was enough support, subsidies and facilities for the country’s 2.4 million rice farmers. We do not have to import our staple food and rice farmers can have decent incomes.

Why do we have to risk not having rice on the table from rice-exporting countries stopping exports to make sure that they have enough to feed their own people? How sure are we that the price of rice will remain stable if domestic production remains backward and global rice prices are volatile?

Why make our farmers suffer? Along with other producers, they provide the nation with food to eat, yet they are among the poorest.

The government is liberalizing the critical rice sector out of blind adherence to so-called free market and globalization policies. All this does is create opportunities for giant agribusiness corporations to make even more profits from selling their expensive, chemical-laden, unhealthy, and environmentally-destructive products.

Filipino farmers have to deal with so many man-made woes aside from the vagaries of the weather. Yet they are not passive to these. Farming communities nationwide practice sustainable agriculture. These should be recognized and supported. Indigenous peoples’ schools teach organic agriculture and oppose corporate encroachment on their lands. These should be hailed not vilified or shut down.

Peasant organizations struggle for their own land to till. They deserve to be given these as well as given the means to make these productive. Precarious rural incomes and livelihoods should become a thing of the past. And, as every Filipino deserves, farming communities should have decent education, health and housing as well as the conveniences of water, electricity, telecommunications and transport. In all of these, the government’s role in running an economy for the people is the most important intervention of all. #

‘Day of Defiance’ ng magsasaka sa Mendiola, naningil kay Duterte

Pinangunahan ng Kilusang Magbubukid ng Pilipinas ang unang kilos protesta sa Mendiola simula ng pandemyang coronavirus bilang ‘Day of defiance’ sa Buwan ng Magsasaka noong Oktubre 21, 2020.

Isang ‘Hukumang Magbubukid’ ang kanilang isinagawa kung saan hinatulan nilang “guilty” si Duterte dahil sa anila’y kriminal na kapabayaan at pasismo. Kinondena nila ang Rice Tarrification Law at pagpaslang sa halos 300 mga magsasaka sa ilalim ng administrasyong Duterte. (Bidyo ni Joseph Cuevas/Kodao)

Farmers lose Php85 billion during first year: Peasant livelihoods destroyed, food insecurity worsened by rice liberalization

by IBON Media

Research group IBON said that rice liberalization has undermined the livelihoods of millions of farmers and most likely even pushed many into bankruptcy. It will only worsen the country’s food insecurity, the group said, as already seen with record high rice imports.

Enacted one year ago, the Rice Liberalization Law or Republic Act (RA) 11203 removed quantitative restrictions on rice importation and replaced this with 35% tariff on rice imports from the region and higher from elsewhere. The law was justified as the solution to high rice prices in 2018. Tariffs from the rice imports were also supposed to fund programs to make Filipino rice farmers competitive, eventually increasing their incomes.

IBON said however that the influx of record rice imports has devastated farmers’ livelihoods. The Philippines imported a record 3.2 million metric tons (MMT) of rice in 2019, surpassing the previous record of 2.4 MMT of rice imports in 2008 by 40 percent. That was the first time that the Philippines gained the dubious distinction of being the world’s biggest rice importer.

Huge rice imports caused palay farmgate prices to plummet, said IBON. The price of palay fell by 22.4% from Php20.14 per kilogram (/kg) in end-December 2018 to Php15.63/kg in the same period in 2019, said the group. Some major rice producing provinces such as Nueva Ecija, Isabela, and Laguna even reported palay prices as low as Php7/kg and Php10/kg.

IBON estimates that rice farmers in aggregate suffered a total income loss of Php84.8 billion in 2019 due to the catastrophic drop in palay farmgate prices. This is equivalent to an average income loss of some Php35,328 per rice farmer.

Farmers groups have reported that as many as 200,000 farmers were forced to stop planting rice due to income losses. Also, at least 3,000 of the country’s some 10,000 rice mills reportedly closed down due to the increase in rice imports.

IBON said that the widespread disruption of rice producers is intentional and the result of free market forces being unleashed on the country’s backward agriculture. The group assailed the economic managers for using high rice prices to justify pushing marginal and so-called unproductive farmers and millers into bankruptcy.

IBON said that the country’s food insecurity is getting worse under the Duterte administration especially because of the low government priority given to domestic agriculture including the rice industry. The country’s rice importation grew from the equivalent of around 5% of total rice production in 2016 at the start of the Duterte administration to 26% of total rice production in 2019. Unprecedented rice imports are exposing the country’s inability to produce sufficient quantities of its staple food, said the group.

IBON said that the rice liberalization policy is another indication of government’s long-time neglect and disregard of local rice production and agriculture in general. The group said that the government should not pit rice farmers and rice consumers against each other. Farmers and consumers have a common interest in the protection and strengthening of the domestic rice industry towards rice self-sufficiency. #

World biggest rice importer? Peasant group renews call to junk liberalization law

By JOHN AARON MARK MACARAEG
Bulatlat.com

MANILA – A peasant group has reiterated its call for the repeal of Republic Act No. 11203 or the Rice Liberalization Law as the country is set to be the world’s biggest rice importer.

Peasant women group Amihan, citing data from the United States Department of Agriculture (USDA), said the Philippines will be importing up to three million metric tons this year, beating China’s 2.5 million tons.

China’s population is 13 times more than the Philippines.

In a statement, Cathy Estavillo, Amihan secretary general, said, “This is an epic failure of the Duterte government, when rice sources are supposed to be within the country, but his policies made this distant and even at the discretion of foreign traders colluding with local big traders, who will eventually dictate supply and prices in the domestic market.”

The Rice Liberalization Law was signed February this year to supposedly reduce the price of rice by removing the quantitative restrictions on rice imports.

This, however, only resulted in the falling farmgate price of palay, which fell to as low as P7 in Central Luzon.

Estavillo, also spokesperson of consumer group Bantay Bigas, underscored that they have repeatedly warned that “RA 11203 will turn Filipinos into beggars of imported rice.” “We all have witnessed this law causing bankruptcy to rice farmers, and this will lead to displacement and ultimately declined productivity,” added Estavillo.

The peasant rights advocate also said that becoming the world’s biggest rice importer in a mainly agricultural country is an obvious failure of the government to provide “food on the table.”

“We reiterate, Rice Liberalization Law is anti-peasant and anti-Filipino. It is an economic and social crime against Filipinos as it threatens our inalienable right to food and food sovereignty,” Estavillo said. #

Nueva Ecija NFA can only buy 4% of province’s rice harvest

The National Food Authority (NFA) in Nueve Ecija can only buy four percent of the province’s expected rice harvest of 21 million sacks this main cropping season, its provincial manager said.

In an interview with local radio station Radyo Natin-Guimba last Friday, NFA provincial manager Genoveva Villar said they are ready to buy 900,000 sacks of palay (unhusked rice) from the province’s rice farmers at P17.00 per kilo.

Villar said further instructions have yet to reach their office after President Rodrigo Duterte ordered that the NFA buy all palay from farmers following widespread complaints that the crop is being bought at only P7 per kilo due to the influx of cheap rice imports.

Palay was bought by traders at P21 per kilo prior to the impmentation of the Duterte government’s rice tarrification law.

The NFA in the province is willing to follow the president’s instructions if funds are made available, Villar said.

Villar added that if farmers would be qualified for added incentatives if their palay is fully dried.

Radyo Natin-Guimba reported, however, that farmers said this is a difficult precondition as the rainy season has already arrived and there are shortages of drying facilities in the province.

Villar also admitted that its warehouses are currently full of both imported and local rice, which she said is in accordance with the government’s buffer stock policy.

She suggested that the government may rent additional warehouses.

Radyo Natin-Guimba also reported that the NFA’s national budget of P7 billion is only enough to buy nine million sacks, which is not even half of Nueva Ecija’s projected harvest of 21 million sacks.

Nueva Ecija is one of the country’s top rice producing provinces. It current cropping is expected to be harvested in October. # (Raymund B. Villanueva)

Rice tariffication will displace rice farmers, worsen food insecurity–IBON

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 percent 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 percent) 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 domestically-produced rice is unnecessarily expensive because of long-standing government neglect of the agriculture sector.

No more than five percent 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 percent 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 bow 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. #

 

33 percent rise in rice allowance for QC teachers

The Alliance of Concerned Teachers (ACT) expressed elation over the approval of a bigger quarterly rice allowance for Quezon City public school teachers and employees.

“This is a victory for the long campaign of the Quezon City Public School Teachers Association (QCPSTA) and the ACT Teachers Union-National Capital Region,” ACT national president Joselyn Martinez told Kodao.

The local government of Quezon City announced Monday that Mayor Herbert Bautista approved City Ordinance 2754-2018 increasing the rice allowance of the city’s public school personnel from P1,500.00 to P2,000.00 “in recognition of their valuable services to society.”

The new ordinance amended City Ordinance 2312-2014 that granted a P1,500 quarterly rice allowance to teaching and non-teaching personnel of the Division of City Schools of Quezon City.

The increased benefit will be implemented in the first quarter of 2019, the QC government said.

Martinez cited QC Councilors Ally Medalla and Raquel Malangen as authors of the ordinance.

“This is the result of QCPSTA’s alliance work with the city councilors. [It] talked to all members of the City Council as well as Mayor Bautista and Vice Mayor Joy Belmonte,” Martinez said.

Martinez called on the city government to revert to Landbank in dispensing teachers’ local allowances citing delays caused by local government unit’s transfer to BPI Globe Banko. # (Raymund B. Villanueva)

Farmers decry rice crisis

Farmers from the Alyansa ng mga Magbubukid sa Gitnang Luson (AMGL), AMIHAN (National Federation of Peasant Women) and rice watchdog Bantay Bigas, trooped to the Department of Agriculture (DA) Office in Quezon City last September 5 to protest the prolonged rice crisis in the country.

The groups also decried National Food Authority (NFA)’s importation of weevil-infested rice on one hand and and essentially near zero ‘palay’ procurement on the other.

According to Joseph Canlas, AMGL chairperson, the DA and NFA are useless in solving the problem of rice shortage.

“There was enough ‘palay’ that were harvested by farmers and, in fact, the NFA is buying them at a lower price but still they keep the plan to import weevil-infested rice which is a big insult for farmers and consumers,” Canlas said.

He also belied NFA’s excuses that farmers intend not to sell their harvest due to its low buying price.

During dry season, private traders buy at P20 per kilo of palay, which declines during wet season.

The group scores the TRAIN law because of the triggered unabated oil price hikes that resulted to increases in the cost production of rice.

They cited from October to May planting season, the cost for fuel increased by P914 or 15 percent from the previous P6781 to P7195 per hectare.

Meanwhile Bantay Bigas challenged the government to immediately stop rice importation and procure majority of palay this coming harvest season.

They also warned Secretary Manny Piñol not to insist on feeding weevil-infested rice to consumers.

“If they don’t act on the crisis, they must resign,” Bantay Bigas ended.# (Video and report by Joseph Cuevas)

‘Local palay procurement over importation’

“NFA should prioritize local palay procurement over importation to stabilize rice prices and avoid the continuing rice crisis because of limited NFA rice supply.”—Bantay Bigas

‘Itaas sa P20 ang kilo ng palay’

“Isang dekada nang binibili ng NFA ng P17 kada kilo ang palay. Panahon na para taasan ang support price ng NFA at gawing P20 kada kilo.”–Zenaida Soriano, chairperson, Amihan