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Farmers tell Villar: ‘Be sincere and repeal rice tarrification law’

The country’s biggest peasants’ organization challenged Senate Committee on Agriculture and Food chairperson Senator Villar to act against her own rice tarrification law to prove sincerity in recent pro-farmers pronouncements.

Reacting to the senator’s directives at last Monday’s budget hearing to the Department of Agriculture to realign its 2023 proposed budget to help farmers produce high-quality seeds, the Kilusang Magbubukid ng Pilipinas (KMP) said Villar should instead take a look at her pet rice importation liberalization law.

“Senator Villar can rather show her sincerity by supporting demands to review and repeal RA (Republic Act) 11203 or the rice tariffication law,” KMP chairperson Danilo Ramos said in a statement Wednesday.  

In last Monday’s hearing, Villar castigated DA for its preference for imported hybrid rice seeds over inbred and organic rice seeds, spending P7.9 billion for hybrid seeds distributed to 1.7 million farmers while only spending P3.7 billion for inbred seeds.

Villar also directed the agency to support the use of compost and organic fertilizer over expensive chemical-based fertilizers.

Fertilizer prices increased by up to 22% since 2020, severely affecting rice production and farmers’ incomes, the KMP said.

‘Hypocritical’

The group said that along with the late dictator Ferdinand Marcos Sr.’s Masagana 99 program, the Villar-sponsored rice liberalization program have further made rice farmers’ lives difficult.

“These two programs, implemented more than 40 years apart, have destroyed the lives and livelihood of rice farmers, and further ruined the local rice industry,” the group added.

KMP said hybrid rice propagation was the central component of Martial Law-era Masagana 99 that heavily relied on expensive imported seeds and farm inputs, which left farmers in debt.

“Up to this day, the majority of Filipino rice farmers remain dependent on the practices set by the Green Revolution and Masagana 99,” Ramos said.

Ramos added that the rice liberalization law that Villar principally authored and enacted in 2019 led to heavy income losses for rice farmers amounting to P206 billion in the past three years.  

“The failure of RA 11203 is undisputed, the influx of imported rice caused massive bankruptcies among rice farmers, due to depressed farm gate prices,” Ramos said. 

Legislators should support the genuine protection and development of the domestic rice industry. Senator Villar will remain hypocritical if she continues to support rice liberalization while espousing to advance local seeds and fertilizer production, Ramos said.

The KMP also challenged Villar to sponsor the Senate version of House Bill 405 Rice Industry Development Act or the Food Self-Sufficiency Act of 2022.

KMP said that an estimated 96% of Filipinos are rice consumers while production involves around 3.8 million rice farmers who cultivate 4.7 million hectares. # (Raymund B. Villanueva)

Farmers question budget cuts on irrigation and rice program equipment

Marcos bailiwicks to get more road projects in 2023, KMP reveals

The Kilusang Magbubukid ng Pilipinas (KMP) questioned proposed fund cuts for irrigation and equipment procurement for the country’s national rice program in next year’s proposed national budget.

The farmers’ group reported that the Department of Agriculture proposes a P211 million cut in the budget for the Irrigation Network Service from the current P932 million to P721 million in 2023.

The KMP added that the agency, led by President Ferdinand Marcos Jr. himself, proposes a 64% budget slash from the current P1.9 billion to P700 million for the Provision of Agricultural Equipment and Facilities of the ongoing National Rice Program.

Likewise, the Extension Support, Education, and Training Services budget for the National Livestock Program will be slashed by P82 million from P611 million to P529 million, the KMP said.

“These are crucial projects, activities, and programs related to the recovery of the slumped rice and livestock sectors. Why impose these budget cuts?” former agrarian reform secretary and KMP’s long-time leader Rafael Mariano asked.

Agri budget for counter-insurgency

In a statement, Mariano also said that the agency must explain why the DA’s proposed 2023 budget seem to prioritize programs that are being used for the government’s counter-insurgency project.

Among these include the budget for the Special Area for Agricultural Development (SAAD) program proposed to enjoy a P251 million budget increase from P923 million to P1.1 billion next year.

SAAD, however, is not a generic DA project but was created by former President Rodrigo Duterte’s Executive Order 70 that also created the National Task Force to End Local Communist Armed Conflict.

“Technically, this budget for SAAD is a budget for counterinsurgency under the guise of social and economic interventions such as social preparation, production and livelihood, marketing assistance and enterprise development. We want to know, how in reality, SAAD aids in poverty alleviation of farmers and fishers when the most basic issues in rural communities are not being addressed,” Mariano said.

More agri budget for Marcos’ home regions

KMP also noted that the DA’s proposed 2023 budget seems to favor Marcos’ home regions, Ilocos and Eastern Visayas. The president’s father, Ferdinand Sr. was from Ilocos Norte while his mother is from Leyte.

“[The KMP finds] it dubious that the DA gave funding preference for the construction, repair and rehabilitation of farm-to-market roads (FMR) in key production areas in known ‘Marcos territories’ like in Regions 1 and 8,” the group said.

From P7.5 billion, the farm-to-market roads budget will increase to P13.1 billion, of which some P1.86 billion will go to Region 1 and P1.41 billion for Region 8, the group reported.

KMP said it identified more than 100 FMR projects in Ilocos Norte and Leyte provinces alone, mostly concreting of barangay roads. Each FMR project ranges from P12 million to P30 million.

KMP added that farm-to-market road projects easily become budget for “farm-to-pockets” operations.

“Sana, hindi tatambakan lang ng graba (gravel) ang isang kilometro ng kalsada tapos tatawagin nang farm-to-market road. Kailangan busisiin ang mga badyet para sa farm-to-market roads dahil dito laging may mga kumukubra,” Mariano said.

(We wish they will not just dump gravel on short stretches and already call them farm-to-market roads. There is a need to investigate the budget because corruption is rife in such projects.)

“Huge amounts are spent on roads that are repaired or rebuilt over and over, resulting in favored contractors and duplication of projects. Corruption is also a given in these projects,” the farmer-leader added. # (Raymund B. Villanueva)

Farmers dismiss mega-farm proposal as not viable, urges lowering of prices of farm inputs instead

A farmers’ group said the Department of Agrarian Reform’s (DAR) mega-farm project proposal is not viable without genuine land reform and subsidies for farmers, proposing the immediate lowering of prices of farm inputs instead.

The Kilusang Magbubukid ng Pilipinas (KMP) said DAR’s blueprint to try to bring down rice prices to P20 per kilo as “aspired for” by incoming President Ferdinand Marcos Jr is another form of lip service and empty promise to farmers in an obvious effort to pander to the incomingadministration.

“Truth be told, these DAR officials are only attempting to score brownie points from Bongbong Marcos Jr to retain their government posts,” KMP chairperson Danilo Ramos said.

Marcos said during the recent campaign period he wishes to see rice retail prices reduced to P20, a statement he later clarified was only an aspiration.

KMP however said the dream of a P20 per kilo of rice will not happen under the government’s existing land reform program that obligates beneficiaries to pay for land amortization.

The group instead renewed its call for the DAR to cancel land amortization, grant more subsidies to farmer and reduce production costs for rice to ultimately become more affordable.

“In fact, most ARBs in rice lands still have unpaid principal amortization and cannot pay for the 6% interest per annum imposed by the government under the bogus Comprehensive Agrarian Reform Program (CARP),” Ramos revealed.

Obvious pandering

In a press conference Monday, DAR Secretary Bernie Cruz proposed to consolidate small and individual rice farms into mega-farms he dubbed as the “Programang Benteng Bigas sa Mamamayan” (PBBM, PHP20 Rice for the People Program).

PBBM is an obvious reference to an acronym Marcos supporters are already using to refer to the incoming president: President Bong Bong Marcos.

“The mega farm is a cluster of contiguous farms that are consolidated to form a sizable plantation capable of producing a large volume of farm products to meet the demands of consumers,” Cruz said.

The DAR said the PBBM may start with an initial 150,000 hectares that can produce an average of 142 cavans or sacks of rice per hectare per cropping season.

The agency said it will translate to a gain of PHP76,501 annually for agrarian reform beneficiaries, adding that if approved by the incoming Marcos government, it may lower the price of rice to PHP20 and liberate the agrarian reform beneficiaries (ARB) from subsistence farming.

The KMP however dismissed the proposal, proposing instead the following steps to bring down rice prices:

  1. Stop amortization payments and condone unpaid fees by ARBs;
  2. Give enough subsidies for rice production instead of loans; and
  3. Lower prices of very expensive farm inputs.

Expensive farm inputs

Photo by Jek Alcaraz/Kodao

Former DAR secretary Rafael Mariano said the government must work to bring down rice production costs to P6 to P8 per kilo from the current P12.

“DAR’s capitalist farm-model in a small, old-fashioned and archipelagic country will not work,” he added.

The former KMP chairperson said the constantly rising fuel prices add to increasing fertilizer prices, now at a “staggering” P2,800 to P3,000 per bag.

 “Expensive cost of production hurts farmers economically and pushes them deeper into debts. All farm inputs, not just fertilizer, are at a record high, or at least 12% across agricultural commodities. Industry experts forecast that fertilizer prices will remain high until petroleum prices drop,” the KMP said.

The group said the addressing the problem of expensive farm inputs is imperative and more viable than DAR’s proposal.

“President-elect Bongbong Marcos Jr should first agree and heed the broad people’s demand to suspend fuel excise taxes. Ito ang unang hakbang para kagyat na mapababa ang presyo ng langis at bilihin. Bawat OPH ay nakakaapekto sa presyo ng bigas, pagkain, bilihin at mga serbisyo,” Mariano said. (This is the first step in order to lower the prices of goods and services. Every oil price hike contributes to spikes in the prices of rice and other food items, other goods and services.)

Mariano added that DAR’s PBBM’ target of 142 cavans (7.1 metric tons) per hectare is also too good to be true and is even higher than Vietnam’s average 10-year yield per hectare average of 5.41 MT.

The Philippines’ current average yield is only 4.35 MT per hectare (87 cavans).

Mariano ppointed out that Vietnam, one of the world’s top rice-producing and exporting countries, allocates around 6% of its budget to agriculture, in contrast to the Philippines average of around 3%.

“Gusto natin ng mura at abot-kayang bigas para sa masa pero dapat gawin sa makatotohan at siyentipikong paraan at huwag daanin sa bolahan.” (We want rice that is cheaper and affordable for the people. But we want factual projections based on scientific data, instead of false promises.) # (Raymund B. Villanueva)

The ill logic of rice liberalization

by Rosario Guzman/IBON Foundation

Runaway inflation has always been our economic managers’ alibi for liberalizing importation. Food always takes a beating from this short-sighted policy, as it has the single biggest weight of 36% in the average commodity basket.

Inflation reached its highest in a decade in 2018 upon the implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) Law, the most comprehensive and most regressive tax reform the country has ever had. TRAIN slapped value-added taxes and excises on consumer products, including unprecedentedly on all petroleum products. It reduced income taxes, which have benefited only the rich more than the middle class and the poor, as it has ultimately rebalanced income gains with higher prices.

But it was still the rice’s fault, according to our economic managers, and hastily they did push for the tariffication of the quantitative restrictions on the country’s staple. Rice bears a 9.6% weight on inflation and it is an extremely socially sensitive product on the same level as diesel that TRAIN had finally taxed; thus it has to be kept under control. That is their logic for subjecting local rice to undue competition with imported rice that is far better government protected and supported.

Wrong premises

Our economic managers would later point to decreased rice retail prices, although still higher than pre-tariffication levels, to support the argument that imports liberalization indeed benefits the Filipino consumer.   

It’s turning out to be a feeble argument, however, as the country would again see the highest food inflation in 27 months at the beginning of 2021, with meat and vegetables contributing the most. The apparent cause is government’s non-containment of the African swine fever epidemic in the hog subsector. But despite the obvious need for government intervention in domestic production, the official quick reaction is again liberalization, this time of pork imports.

The government has simply been pitting the welfare of local producers against that of the consumers, apparently in a principle of subordinating the interests of the few (the farmers) to the welfare of the many (the consumers). This is also wrongly premised on the Filipino consumers being concerned only with cheap commodities. Joblessness is at its worst level, while economic aid in the face of the pandemic has been meager. Majority of the Filipino consumers need to be productive first and earn decent incomes, or in the immediate be given economic relief, before they could truly benefit from lower prices. But government’s obsession with imports liberalization has only worsened the jobs crisis, loss of livelihoods, and farmers’ bankruptcy.

Denied reality

From 2018 to 2020, palay prices have gone down by an average of 19.5% for both fancy and other varieties. Palay prices are lower by a minimum of Php3.30 per kilo for other varieties, from a national average of Php20.06 to Php16.76 per kilo. Nine of the 17 regions have even lower palay prices than the national average. These are based on official statistics.

Field studies conducted on the first year of the rice tariffication law by Bantay Bigas, a nationwide network of rice advocates, showed farmgate prices going down to as low as Php10-15 per kilo. Palay prices in the range of Php10-14 per kilo were noted in the country’s rice bowls – Nueva Ecija, Tarlac, Bulacan, Pangasinan, Isabela, Ilocos Sur, Mindoro, Bicol, Negros Occidental, Capiz, and Antique. Palay prices in the range of Php11-15 per kilo were seen in Agusan del Sur, Davao de Oro, Davao del Norte, South Cotabato, North Cotabato, Lanao del Norte, and Caraga. Bantay Bigas noted that palay prices continuously declined in four consecutive cropping seasons right after the passage of the rice tariffication law.

Value of palay production went down from Php385 billion in 2018 to Php318.8 billion in 2020 despite a slight increase of 229,000 metric tons (MT) in production volume at 19.3 million MT in 2020. If the average farmgate price of Php20.06 before rice tariffication was maintained, production value would be more or less at the level of Php387 billion – thus a visible loss of Php68.3 billion in the last two years, or Php32,523 for each rice farmer.

These are based on official figures. Bantay Bigas noted that farmers in Zaragoza, Nueva Ecija lost Php20,000 to Php35,000 per hectare in 2019, as farmgate prices dropped to Php14 per kilo during the dry season and Php10-13 per kilo during the wet season. Farmers in Barangay Carmen in the same municipality have mortgaged about 40% of their rice lands or an estimated 80 hectares due to depressed farmgate prices. In Gabaldon, Nueva Ecija, some rice lands near the highways were already sold at Php1 million per hectare.

In 2019, rice farmers’ net income per hectare decreased by 32% in the dry season, by 47% in the wet season, and by 38% on the average as compared to figures in 2018, according to the Philippine Statistics Authority. This translated to substantially lower profitability ratio for the farmers. For every peso the rice farmer spent on one hectare, his profit declined in 2019 from 73 centavos to 53 centavos in the dry season, from 63 to 36 in the wet season, and on the average from 73 centavos to 47 centavos.

The average net income of Php21,324 in 2019 translated to Php236.93 per day in a 90-day cropping season, down from 2018’s Php34,111 or Php379.01 a day. The farmer lost Php142.08 income per day, which was way bigger than the Php4.65 per day that his family supposedly gained from cheaper rice. (Regular milled rice was reportedly cheaper by Php2.86 per kilo in 2019. The daily average per capita rice consumption is 325.5 grams or 0.3255 kilogram. Thus, 0.3255 kilogram x 5 family members x Php2.86 = Php4.65)

These are official figures. We are not even talking about rice farmers who incurred net losses.

Also incidentally, the Php236.93 income per day recorded in 2019 was short of the already incredibly low official poverty threshold of Php354 per day for a family of five. It was not even enough for the official family food threshold of Php248. The reality is undeniable: the country’s rice producers live in acute poverty and hunger, and rice liberalization is directly responsible for this irony.

The bigger picture

The rice tariffication law purports to offset these losses by allocating the tariff revenues to support farmers. We do not need to go into detail about how these are not enough or at worst tokenistic. We only need to see the trend of government’s agricultural support to conclude that the Duterte administration has put the sector aside in favor of other hollow and counter-productive budget items, including its infrastructure agenda.

The budget for agriculture in 2021 is only Php110.16 billion, merely 2.2% of the national budget. This has diminished further from the 2019 share of 2.7%, which is apparently already the largest under the Duterte administration. Including the budget for agrarian reform, the annual average allocation in 2017-2020 is only 3.6% of the national budget, the lowest in 21 years. This still got smaller at 3.2% in 2021.

The country’s rice self-sufficiency ratio has significantly gone down from 93.4% in 2017 to only 79.8% by 2019. Such increased import dependence is not even justified anymore by the goal of curbing inflation nor by inadequate supply. It is but a formed habit from chronically neglecting domestic production. To illustrate, despite the hyped increase in production volume in 2020 and even at harvest time, the Duterte government approved the importation of 300,000 MT. The pandemic has apparently prompted exporters such as Vietnam and Thailand to prioritize their domestic consumption, triggering already ingrained insecurity among importers such as the Philippines.

Also totally negating the inflation argument now is the fact that Vietnam and China have already started buying rice from India due to increased local prices. This could precipitate another fast rice inflation in the narrow global market, on which the Philippines has unduly relied at the expense of its own direct producers.

This brings us back to the bigger picture – that the farmers’ struggle for the reversal of rice liberalization and for more responsible state intervention is not just about themselves but the more meaningful future of food security and national development. #

= = = = = = =

(A contribution to the virtual forum “Rice Tariffication Law: Two Years After” sponsored by the College of Economic Management, University of the Philippines Los Baños, 22 June 2021)

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. #