The proponents of rice tariffication have been arguing that it is better to import cheaper rice from the world market and nudge the “inefficient” rice producers at home to switch to the production of higher value-adding crops. This way the rice-consuming public is assured of cheaper rice, while the marginal rice farmers have the opportunity to earn more. The government is also spared of the difficult task of having to allocate extra resources to buoy up farmgate prices for palay while keeping the retail prices for rice at a low level based on the old buy-high-sell-low operational guidepost of the downsized National Food Authority (NFA).
In this regard, the proponents of rice trade liberalization even cite Singapore as an example of a food-secure nation. Singapore literally imports all the food requirements needed by a population of six million citizens and three million or so guest workers.
But Singapore is not comparable to the Philippines. It is a city state with virtually no agricultural lands.
Singapore is not also in the business of importing food sans any development framework. In fact, Singapore’s food security is a study on the centrality of the role of the government in securing food security for its population. Singapore has a Singapore Food Agency, which oversees the multiple tasks of diversifying sources of food imports (involving over 100 countries), coordinating with food importers and processors, ensuring the safety and availability of rice and essential food stuffs, preventing volatile swings in food prices, and so on. In short, Singapore has a holistic approach to food security.
Landless Singapore is also in agriculture. It invests in the lands of other countries. It is a keen promoter of urban agriculture. Singapore claims that it is now “self-sufficient” in tomatoes, thanks to hydroponics. To boost urban agriculture and promote R&D, Singapore even set up an Agriculture Productivity Fund, with a beginning budget of US$45 million in 2014.
Singapore also tries to add value to its food and raw materials imports by processing and re-packaging them into exportables. Philippine supermarkets carry some of the re-processed Singapore food exports such as snacks in cans or in tetrapaks.
Incidentally, Singapore has a strong-dollar policy. In sharp contrast to the continuous depreciation of the Philippine peso, the value of the Singapore dollar has hardly changed vis-à-vis the US dollar for several decades already. A senior Singaporean economist explained to this author that Singapore needs a strong Sing dollar to be able to import all its food and raw material requirements at affordable rates. But at the same time, Singapore has to add extra value for every unit of import. Eventually, a great percentage of these imports are converted into higher value exports. This can only happen if a country moves up the industrial ladder and invests continuously on productivity and innovation.
Like South Korea and Taiwan, Singapore had become a “newly-industrialized country” or NIC in the 1980s-1990s, bypassing the Philippines in those decades. Unknown to many Filipinos, Singapore has become a little Germany, exporting high-precision products such as munitions, aircraft parts and pharmaceutical products. In the 1980s-1990s, Singapore became a major destination of Philippine electronics because Singapore had by then “graduated” at a higher level of electronics assembly while the Philippines remained stuck at the low or middle levels of the global value chain production for electronics (still true at present).
When Malaysia imposed restrictions on the supply of water to its neighbor, the Singapore’s Public Utilities Board promoted the development of “NEWater”, clean water based on purified waste water (sewage). The “NEWater” technology is now being exported by Singapore to the Middle East and other countries.
In summary, the argument that Singapore is food secure because this country has embraced full economic deregulation, as represented by our rice trade liberalization program, rings hollow. The agricultural economists imagining a seamless global market for rice and other food items doing wonders for Singapore and other countries are simply engaged in idle imagining.
A deregulated market by itself cannot secure food security for its population. Nor can it sort out what are the best uses of its land and other resources. The reality is that most countries in the world pursue their respective food security programs through the very visible and interventionist hand of the government.
This is exemplified by the United States and the European Union, both of which are heavy subsidizers of their farmers. India and other developing countries have been questioning the hypocrisy of the developed countries, which seek the all-out opening of agricultural markets while providing tens of billions of dollars annually to their home producers. This is one reason why the World Trade Organization (WTO) has failed to conclude its Doha Development Round trade talks that started two decades ago, in 1999-2000.
Big rice producers with limited rice imports such as China, India, Indonesia, Malaysia and South Korea all maintain a balanced approach to rice production at home, which they shower with government assistance and protection, and rice importation, which is strictly monitored and regulated. China even aggressively looks for lands in other countries where they can invest on the production of crops they need to export back to China. The point is that most countries of the world have a state-centric policy on food security.
Meantime, in the Philippines, there is so much uncertainty as to what will happen next under the Rice Tariffication Law dubbed by organized farmers as Rice Liberalization Law. The first year of RTL’s implementation saw big rice importers gaming the rice trade sector. They imported over three million tons of rice, making the Philippines the world’s biggest rice importer. In the process, they succeeded in depressing the farmgate prices of palay to the great sorrow of palay producers all over the archipelago.
Rice farmers who cannot earn or make profits from their rice lands under the new rice trade lib regime, no thanks to RTL, are likely to give up rice farming and sell their lands or land rights to the land bankers, land speculators and big agribusiness consolidators. Small rice farmers, especially the landless tenants who are simply renting the lands or still doing share cropping, cannot switch easily to the imagined production of higher value-adding crops. In the first place, there is the role of culture. Ano ang nakagisnang gawain ng magsasaka sa palay maliban sa pagsasaka sa palayan? Secondly, the infras in the rice areas are not easy to change or modify to give way to new farming systems. The switch can only be made by the richer agribusiness investors, who have the capacity to invest on new infras.
In the end, government agricultural policy makers should ask themselves: Para kanino ba talaga ang RTL?