By Jovee Marie N. dela Cruz & Cai U. Ordinario, September 5 2019; Business Mirror

Image Credit to Business Mirror

THE national government can consider three options, including requesting Congress for special powers to impose quantitative restrictions (QRs), to prevent rice farmers from incurring more losses, according to the chairman of the House Committee on Ways and Means.

Albay Rep. Joey S. Salceda recommended interventions that the national government can implement in his aide memoire for President Duterte and the leadership of the House of Representatives.

Meanwhile, Agriculture Secretary William D. Dar revealed that more provincial governments are heeding the Department of Agriculture (DA)’s call to support local rice planters, mainly by allocating funds to boost the farm-gate price of palay.

Aside from imposing QRs, Salceda said the national government may invoke Republic Act (RA) 8800, or the safeguards law, so it can slap a tariff of much as 80 percent on imported rice outside of the minimum access volume (MAV) of 350,000 metric tons (MT).

“RA 8800 is well recognized under our commitments with the WTO [World Trade Organization] and the provisional measure has a maximum period of one year,” he said.

Salceda also said the government may provide cash transfers to marginal small-lot farmers and concessional loans to big rice farmers. He expects a total of 2.1 million rice farmers to benefit from these interventions.

‘Last resort’

He said President Duterte should consider the request for special powers to impose QRs, which were repealed by RA 11203, as a “last resort.”

“Although less demanding on the budget but shifting the costs to consumers, thus erasing the welfare gains of [RA 11203], the last resort is to ask Congress for special powers to impose QRs, which were repealed by RA 11203 and to allocate a special fund for cash transfers,” he added.

He noted that the grand strategy of liberalization reform was to shift the supply curve to the right and generate welfare gains, while providing state support to rice farmers.

Salceda noted that farm-gate prices of unhusked rice dropped “significantly” to P14 per kg in some areas and to P7 per kg, as reported in Nueva Ecija, Pangasinan and Ilocos Norte, from P17.78 per kg.

The lawmaker traced the sudden drop in the prices of unhusked rice to the increase in local harvest and the huge volume of imports that entered the country following the effectivity of the rice trade liberalization law.

“The law had the unintended consequence of farm-gate prices of palay dropping at record levels [which] put the whole agricultural sector at risk. With no offsetting measures, it [the law] has implications on the social, political and security dimensions of the country,” he said.

The lawmaker also said the palay market and rice market are “clearly disjointed,” with no possible integration opportunities for farmers given the high entry costs of the latter.

“With the wider availability of imported rice, traders are now in a position to negotiate for lower palay prices with farmers,” he said.

“In fear of having their harvest go to waste given the volume of imported rice in the market, farmers sell their palay at rock-bottom prices to traders for cash flow,” Salceda added.

He said the drop in palay prices has also disincentivized millers who are now venturing into trading as well, leaving feed millers in search of darak, or rice bran.

“Rice farmers are in a bind since even the option to shift to alternative land use is constrained by the moratorium on land conversion justified by food security goal and in part due to the non-enactment of the National Land Use, and the option to shift to other crops is constrained by the need for bigger initial capital for inputs and a more reliable irrigation system, higher insurance risk premium or risk of loss due to climate change,” he said.

While RA 11203 mandated the setting up of the P10-billion Rice Competitiveness Enhancement Fund (RCEF) for farmers, Salceda said policy and implementation lags, such as its appropriation from Congress, can worsen the plight of farmers.

Aid from LGUs

More provincial governments have heeded the call of the Department of Agriculture (DA) to support local rice planters, Agriculture Secretary William D. Dar said on Wednesday.

Dar said 30 local government units (LGUs) have expressed interest to partner with the DA and allocated funds to help prop up the farm-gate price of unhusked rice.

He said 13 LGUs have committed to set aside a total of P3 billion for the procurement of palay from planters. “We are happy that we have [the LGUs] as equal partners of the Department of Agriculture,” Dar said in a statement.

The agriculture chief also said 17 more LGUs have expressed intent to partner with the DA in a recent meeting of the department with the League of Provinces of the Philippines (LPP).

These are the local governments of Camarines Sur, Apayao, Agusan del Norte, Agusan del Sur, Biliran, Sarangani, Iloilo, Kalinga, Zamboanga Sibugay, Mountain Province, Oriental Mindoro, Marinduque, Bohol, Capiz, Lanao del Sur, Albay  and North Cotabato.

This is on top of the 13 rice-producing provinces that pledged financial support to rice farmers, to bankroll palay-buying, drying, milling, and rice marketing. Isabela, Nueva Ecija, Ilocos Norte, Ilocos Sur, La Union, Pangasinan, Nueva Vizcaya, Quirino, Tarlac, Pampanga, Bulacan, Cagayan and Bataan collectively allotted a total of P3 billion.

“The League of Provinces of the Philippines is fully behind you in your projects and programs. For sure we want to make our farmers and agricultural growers and producers financially stable,” LPP President and Marinduque Governor Presbitero J. Velasco Jr. said in the meeting.

On Monday, Representative Estrellita B. Suansing of the 1st District of Nueva Ecija disclosed during the hearing of the House Committee on Agriculture and Food that rice prices in her province had dropped to as low as P7 per kg.

Suansing feared that this could even go down to P5 per kg once farmers start harvesting wet season rice. The National Economic and Development Authority (Neda) said Nueva Ecija will remain as the most competitive in rice production even when the QR on rice is removed.

However, Neda Assistant Secretary Mercedita A. Sombilla said the figure cited by Suansing is inconsistent with official data released by the Philippine Statistics Authority (PSA).

Based on the latest PSA data, Sombilla said the farm-gate price of dry rice averages P17 per kg to P18 per kg, while wet right is being bought an average of P13 per kg to P14 per kg.