TODAY there are 10 million rice farmers in the Philippines. Extrapolating their number of dependents, they constitute a big portion of the over 100 million Filipinos today, and they are in trouble.
Not much of their land can be reached by irrigation facilities and rain has not been heavy on lands depending on rain for water.
On the other hand, the rice tariffication law (RTL, RA 11203), recently passed but lacking yet in publicized IRR (implementing rules and regulations) is a good law. It thinks primarily about food security for 100 million Filipinos rather than just protecting the parochial needs of some 10 million Filipino rice farmers.
For decades, in the name of “protecting” the farmers, rice importation was limited by quota restrictions. There was tons of money to be made, reportedly by bureaucrats who approved the import allocation, the traders who cornered the importation permits and which allegedly acted as a “cartel” in order to dictate market prices. And, of course, there were the smugglers-scarcity being the mother of smuggling.
Divine intervention came last year when these market aberrations resulted in a price supply deficit and prices of rice went to the roof-hiking inflation rate and negatively affecting the gross domestic product (GDP). The government was shocked and, thus, the RTL was born.
Today, the full effect of the law has not yet been felt generally by retail consumers because as Agriculture Secretary William D. Dar said “although some 2.5 million tons of rice have already been imported up to August,” the traders are withholding their market entry in order to command higher prices. Dar had warned them on September 4 that the full force of the law like “economic sabotage,” perhaps, can be meted on these unscrupulous businessmen in Satan’s robe.
The average production cost of palay is at P12 per kilo.
People from the mountains in other rice-growing parts of the country say some
greedy wholesalers there are buying farm-gate palay at only P8 per kilo
stealthily citing what is
happening in some parts of Luzon.
But Agriculture Committee Senate Chairman Sen. Cynthia A. Villar debunked the case explaining that those being sold at P8 per kilo in Luzon were those that have been severely damaged by the typhoon rain causing unwanted moisture.
Buying palay at P8 per kilo will certainly kill the poor farmer, who is forced to agree to this confiscatory price just to be able to pay for the children’s schooling, have food money for the family and buy the seeds for the next planting.
Can one-fathom cruelty as offensive as this? There are those who pretend to “help” the farmers in need but the financial arrangement is such that in the medium term, the poor farmer will be so much buried in obligations that he is forced to give up his land as payment.
We have heard of those who are now landed “oligarchs” precisely by “helping” farmers this way.
Local government units should start buying palay at P20 per kilo (average) to stymie these greedy traders. Dar said LGUs, after all, are autonomous and a mere resolution of their local legislative bodies can authorize the LGU officials to borrow from LandBank and buy palay from farmers at P15 per kilo to 17 per kilo (above production cost) and certainly way above the “criminal” rate of P8 per kilo.
This is necessary because the government cannot use their present approved local 2019 budget because no such specific appropriation exists and using such funds would be technical malversation.
If any funds are left, NFA can also buy, we believe, palay at about the same P20.70 per kilo, as well. But farmers are not enthused to sell to the NFA because of the tedious processes in the collection of payment.
It is important the government acts with dispatch because the so-called Rice Competitiveness Enhancement Fund (RCEF) of P10 billion will still be implemented only in the 2020 budget of the DA.
The P10-billion funds to be distributed to the aggrieved farmers are without interest for six years but their usage is limited to just seed distribution and machinery. What about working capital, sir?
After helping the farmers from the above, will be RTL benefit the rice-eating populace of over 100 million Filipinos? Yes, but not yet perfectly now.
Philippine Statistics Authority shows that today—on average—regular milled rice is still priced at P38.40 and well-milled rice at P43.50, lower than last year but not yet at the government targeted retail price of P27 per kilo of regular milled rice.
Currently, in some areas, palay at farm-gate is bought by traders (not the unscrupulous ones) at P19 per kilo to P20 per kilo and wet type at P17 per kilo to P18 per kilo.
The government buying palay price at P20 per kilo to P22 per kilo for now, therefore, would be of big help. With retail price currently at P38 per kilo, there are enough margins to be shared among the trader, retailer and even the government to pay for LandBank’s interest.
The point is that government must have the correct moral posture—of placing its heart nearest the interest of the poorest sectors of society, which include our millions of rice-industry dependent Filipinos (P150 daily income for a family of five?).
Bingo Dejaresco, a former banker, is a financial consultant, media practitioner, and book author. He is a life member and broadcast chair of Finex, His views here, however, are personal and do not necessarily reflect those of Finex. Dejarescobingo@yahoo.com
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