Bohol farmers face livelihood loss with rice tariffication law

By: Bingo Dejaresco

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An estimated 240,000 rice farmers in Bohol are now facing serious livelihood loss with the impending execution of the new Implementing Rules and Regulations (IRR)of the Rice Tariffication Act.

Due to the visibility of tourism and trade commerce, people may have largely ignored the fact that Bohol is still a predominantly agricultural province with the majority of folks living in rural areas and the farmers totalling about 600,000, which is around 46% of the 1.3 million Boholano population.

Because of the shortage in rice last year, that increased the prices of the basic Filipino staple rice, inflation shot up to 6.7% and negated the 6.2% GDP (Gross Domestic Product) growth of the economy. Rice is a major component of the inflation “food basket”.

President Rodrigo Duterte, thereby, rushed the signing of the Congress-approved Rice Tariffication Act (RA 11203) which removed all quantitative restrictions on rice importation and basically allows anyone to import as much as they can cheaper rice from abroad. The Tariff rate will be 35% from those imported from the ASEAN region, including that from Thailand and Vietnam, 40% tax for those within the MAV (Minimum Access Volume) and 180% in excess of the MAV.

WHAT THIS MEANS TO RICE FARMERS

The production cost of Philippine produced rice is about P11.65 per kilo while those in the ASEAN averages between P 6.00- P6.15 per kilo – clearly making RP-produced rice uncompetitive.  According to rice associations, the prices of Philippine rice averaged between P20-23 to wholesalers in 2018.

Today, the so-called “parity” price to equal the 35% shield due to the tariff wall will only be P17 which could mean there would not be too many wholesalers buying RP-produced rice. Besides the price differential between the P17 and the P11.65 production cost is too narrow to make economic sense to farmers.

According to Provincial Agriculturist Larry Pamugas, representatives of the Department of Agriculture Head Office have already visited Bohol twice to meet with farmer representatives to help save the rice industry.

One area being looked into is the P10-billion Rice Competitive Fund in the 2019 National Budget which can be used into P5billion for purchase of equipment to partially mechanize the process, P3billion for seed distribution and P1billion each for credit or financing and training.

Boholano farmers, however, are lamenting the fact that there is a very slow pace in implementing agricultural initiatives in the country for so long a time. While there are positive indications as to the effective reduction of cost once mechanized as piloted in Ubay, Dimiao and elsewhere – farmers still face a long bureaucratic red tape in having these programs fully implemented, according to farmer groups.

As cheap imported rice especially from Thailand and Vietnam flood the market, who will buy the Filipino farmers (numbering about 10 million nationwide) rice produce?  How will the Boholano rice farmers shift and join the rest of the 460,000 other farmers who are, at least, multi-cropped farmers engaged in corn, vegetable, coconut and fruit growing businesses? One or a combination of them.

Even the 35% tariff proceeds which are also designed to be used to alleviate the plight of the farmers still need to have a budget allocation for 2020 since this is not covered in the 2019 GAA (General Appropriations Act) which itself was also only just recently signed by the Palace after a long tussle between the Senate and the Lower House due to “pork insertions”.

Because of the rice importation liberalization, prices of rice have dropped which helped in bringing down inflation to 3.8 percent recently. That may be good for the 96 million Filipinos but what about the 10 million Filipino rice farmers?

IMPACT ON OTHER INDUSTRIES

Bohol is known to be a “net exporter” of rice in the sense that after satisfying the 115 kilos per capita annual consumption of the rice-eating 1.3 million Boholanos the province is able to sell its surplus rice outside the province.

But with traders likely to prefer to buy and then sell cheaper imported rice from abroad, what happens to the locally-produced rice? What will the role of the National Food Authority under this new regime of liberal rice importation? Has it been budgeted properly in the 2019 GAA to serve NFA’s new-found purpose? Or is the existence of the NFA – as we know it – also in danger together with its numerous NFA rice retailers?

What about the rice millers and warehousing in the province who derive their business from locally produced rice – what will they be doing as a going concern? What about the trucking and hauling businesses?

Pamugas has been discussing “subsidies” from the government with Governor Edgar Chatto to make local rice-farming a viable undertaking and compete with the cheap foreign rice brands. These will probably be issues touching on cheap credit, warehousing, insurance, fertilizers and pesticides and the like. Will these be enough to match the landed cost of imported rice?

Furthermore, even without the full brunt of the Rice Tariffication act on them, rice farmers are already contending with the fact that some 6,300 hectares in 18 Bohol towns have already been negatively affected by the El Nino phenomenon.

It is a fact that the “poverty level” in Bohol has been slowly reduced to 21% (estimated) through the Rico Aumentado and Chatto regimes. 

But with some 240,000 (largely) rice farmers now facing a real economic threat, some measures need to be acted upon swiftly so as not to elevate the poverty level back to a higher plain in the province of Bohol. 

It is a daunting challenge for the new set of provincial and congressional officers to hack as they take their oaths of office this coming June-July. (Bingo Dejaresco)

 



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