Duterte tries to tame hunger through rice imports

By Vincent Mariel P. Galang
Reporter

NILO BINALANGBANG, 61, has been tilling two hectares of land in Occidental Mindoro — one of the rice-producing provinces south of the Philippine capital — for about 20 years now.

He is one of about 10 million rice farmers affected by falling palay prices after a new law allowed cheap imported rice to enter the country. Republic Act No. 11203, or the Rice Tariffication Law, also freed the National Food Authority of its mandate to import the grain after it was given a P7-billion budget to obtain it locally.

“The government failed to solve the issue of tariff,” Mr. Binalangbang said in an interview. “We never felt the support of the government. It never came.”

The Rice Tariffication Law seeks to make rice — a highly political commodity in the Philippines given its importance as a staple food and a major source of employment for millions of Filipinos — affordable to consumers, while raising the income of farmers. The law’s main goal is to ensure food security.

But critics noted that since the law took effect in March, rice consumer prices have indeed gone down, but not low enough as originally expected. The buying prices for farmers’ palay, on the other hand, have continued to go down.

As of last month, average retail prices of regular milled and well-milled rice had fallen to P36.70 and P41.53 a kilo respectively, according to Philippine Statistics Authority data. These fell short of economic managers’ P25 a kilo projection for the staple. The average palay price fell 22.6% from a year earlier to P15.52 a kilo.

A total of 3.72 million metric tons (MT) of imported rice is expected to arrive by yearend, which represents 26% of the country’s annual requirement, Agriculture Secretary William D. Dar said last month. This would make the Philippines the world’s biggest importer of rice this year, beating China.

Palay production for 2019 is expected to reach 18.49 million MT, which is 15% short of the country’s annual need.

The Philippines produced 19.07 million MT of palay in 2018, 1.1% lower than a year earlier as harvested areas and yield declined 0.2% and 0.9%, respectively, according to the statistics agency.

Some rice farmers have opted to sell their land or shift to planting a different crop as farmgate prices continue to fall. Some farmers now sell their harvest for P14 a kilo — a level set by local buyers — to be able to earn, lower than the P19 a kilo of the NFA’s buying price.

Prices so far dissuaded farmers from planting.

SELF-SUFFICIENCY
The government of President Rodrigo R. Duterte now relies on the liberalization of rice imports for food security, after pushing self-sufficiency for years.

The current policy begs the question: is rice self-sufficiency no longer needed?

Rosario Bella Guzman, and economist and executive editor at IBON Foundation, argued that the Rice Tariffication Law jeopardizes food security. “The Philippines has now embarked on import liberalization of its staple, a dangerous path not just for the country’s food security, but more importantly, for that elusive economic development,” Ms. Guzman wrote on the Web site of the Philippine Institute for Development Studies state think-tank a month after the measure took effect.

She cited the “narrow” global rice market, with only 9.7% of global production ending up in the global market in 2018. “Contrary to what President Duterte and his economic managers are saying that Filipinos should no longer aspire for self-sufficiency, the rice-producing world is consuming more than 90% of the rice produced where it is produced,” Ms. Guzman said.

“Even the country’s self-sufficiency ratio in 2017 was 93%. It is inconceivable therefore that the government is declaring that rice-producing Philippines, whose average self-sufficiency ratio in the last 30 years is 91%, should now simply rely on importation,” she said.

Ms. Guzman said economic managers pushing for import reliance contest the capacity of local farmers to feed the nation.

But she also noted that government statistics on average rice consumption is inaccurate and outdated.

“Despite lack of wisdom, the Duterte government has painted a picture that the country can never be rice self-sufficient.”

But Roehlano M. Briones, a PIDS research fellow, said rice self-sufficiency in the Philippines is impractical given the big budget needed to subsidize farmers. “You provide huge subsidies or production support in the order of tens of billions of pesos. But obviously, nobody wants to pay that price, so it’s not a practical policy.”

Rolando T. Dy, executive director of the Center for Food and Agri Business of the University of Asia and the Pacific, said the state should focus instead on increasing farmers’ income and production. “If the farmers are productive and profitable, we may be able to reduce imports, and if they are productive, who knows?” Mr. Dy said. “But on the other hand, we have only so much money to address agriculture-related poverty.”