Nearly 100 years ago, an employee at Johnson & Johnson invented adhesive bandages for his wife who often suffered minor cuts and burns doing housework. Earle Dickson invented the adhesive bandages because he needed a less tedious way of dressing the wounds of his wife. Later, these were marketed under the BAND-AID brand, and Dickson’s adhesive bandages eventually became a fixture in the first-aid kits of families worldwide. As most everyone knows the brand, writers often refer to it as a solution that does not solve the underlying cause of a problem.
Band-Aid solutions are precisely what some lawmakers and economic managers are pitching to arrest the continuous increase in commodity prices. Proposals, such as cutting tariffs on meat and fish, were made after data from the Philippine Statistics Authority (PSA) showed that inflation rate in July accelerated to 5.7 percent. This brought the year-to-date inflation to 4.5 percent, faster than the government’s target of 2 percent to 4 percent for the year. Experts said the worst is not yet over and that inflation would quicken in the next few months.
The unabated increase in commodity prices has punished the poor, who spend about 70 percent of their income for food. This means that for every P100 they earn, around P70 goes to food items, including rice. This is probably the reason some lawmakers and economic managers want to reduce tariffs in meat, fish and wheat. Some lawmakers wanted zero tariff on these products, but economic managers are content with a uniform 5-percent tariff on some food items.
Scrapping or reducing tariffs on imported agricultural products is probably the easiest way to make food more affordable. Unless it becomes permanent, however, tinkering with tariffs will not solve the root causes of the problem of expensive food in the Philippines. For one, many rural areas continue to lack farm-to-market roads, which would help farmers access markets. Their difficulty in tapping markets made farmers reliant on usurers and middlemen who buy their produce at cheap rates.
Farmers turn to usurers or loan sharks because they could not obtain loans from banks that charge relatively lower interest rates. What complicates matters for farmers is that commercial banks usually require collateral and a number of documents. Farmers need help with their production capital given the increasing cost of inputs, particularly at this time when fuel and fertilizer have become more expensive following the implementation of the Tax Reform for Acceleration and Inclusion law.
Obviously, stopgap measures are just that—a temporary expedient. If the Duterte administration seriously wants to make food affordable to all Filipinos, it must take the lead in implementing initiatives that will eliminate the ills plaguing the farm sector. It is the duty and obligation of the government to spend taxes judiciously, and this administration can start by prioritizing the farm sector in its National Expenditure Program.
Implementing policies aimed at making the agriculture sector more attractive to the private sector will not be enough, particularly if facilities and infrastructure, such as farm-to-market roads, are lacking. There were attempts to involve the private sector in agriculture during the past administration via the public-private partnership scheme. Sadly, there were no PPP projects implemented for the agriculture sector. Here’s an example of how the sector gets prioritized: Of the 75 big-ticket “flagship projects” that this administration will undertake, only 11 will benefit farmers.
To help millions of farmers, the government only needs to revisit Republic Act 8435, or the Agriculture and Fisheries Modernization Act of 1997. Afma prescribed additional funds for the agriculture sector on top of the allocation given by the national government to the Department of Agriculture. It also outlined strategies that must be undertaken to modernize the farming sector and prepare farmers for globalization. But two decades after it was enacted, Afma joined the list of laws that were unfunded. The Duterte administration can still do something to prevent this well-intentioned law from ending up in the dustbin.