The pushback of rice farmers to the lifting of quantitative restrictions on rice imports is expected and understandable. The entry of more inexpensive rice from Vietnam and Thailand will depress the farm gate price of palay thereby reducing their income.
The local palay buyers, the rice millers and the big rice traders in Binondo oppose the liberalization of rice imports as well. The palay buyers will have less palay to buy, and the millers, less palay to mill. The big traders in Binondo are threatened too because their dominance and control over the rice industry will be challenged by rice importers.
However, maintaining the status quo will mean that Filipino consumers will have to continue paying 20%–30% more for their staple. And since rice constitutes a significant part of their food budget, to that extent poor households will be that much more food insecure.
This debate over the need to protect local food producers from inexpensive imports versus the imperative to make food available and affordable to make poor Filipinos more food secure had been festering on for at least three decades.
Unfortunately, this problem is not unique to rice but applies as well to sugar, corn, and other crops and increasingly to poultry, livestock, and fisheries. We are simply not producing enough to meet the needs of our growing population.
Among the five major ASEAN economies (i.e. Indonesia, Malaysia, Thailand, Vietnam and the Philippines) we are the only net food importer. Singapore the prosperous city state is a net food importer too but it has no choice because it has little farmland.
What ails Philippine agriculture had been the subject of numerous studies both by own scholars from the UP System and the Philippine Institute of Development Studies (NEDA), as well as by analysts of the Asian Development Bank, the World Bank, the UN Food and Agriculture Organization and the institutes of the Consultative Group for International Agricultural Research (CGIAR) led by the International Food Policy Research Institute (IFPRI) in Washington D.C. The conclusions invariably lead to the lack of and/or inappropriate or faulty policies.
Indeed, there are systemic issues which remain unresolved. Among them are: 1) the continuing break-up of farm lands and limits to land ownership under agrarian reform, 2) lack of small farmers’ access to credit, 3) weakening of rural extension with devolution, 4) undue emphases on rice, corn, sugar and coconut to the neglect of more profitable tree crops, poultry and livestock, and prominently, fisheries, and 5) underinvestment in rural infrastructure and research and development. Also very contentious, the continuing monopolies of the National Food Authority (NFA) and Sugar Regulatory Administration (SRA) over the rice and sugar sectors, respectively.
However as a technical agriculture graduate and a practicing farmer myself, I have a slightly differently nuanced perspective. Even if the above-enumerated policy issues were resolved, it does not necessarily follow that our woes in agriculture will be over.
Our problem with agriculture is not so much for lack of proper policies and enabling legislation but more of inadequacy in the nitty-gritty of program planning, implementation and monitoring and feedback and embarrassingly, graft and corruption.
I have come around this conclusion based on the following observations:
We have a surfeit of overarching policies, strategies and enabling legislation to move agriculture forward. The Agriculture and Fisheries Modernization Act (AFMA), the Fisheries Code, the Forestry Code, the Local Government Code, the Agriculture Competitiveness Enhancement Fund (ACEF), among others, are Olympian in their purposes and comprehensive in their coverage. For sure they can be improved further but all the essential principles, purposes and directions are there. All that remain to be done is to translate the intents of these laws into well-thought out programs and implement them.
For specific subsectors we have laws creating the Philippine Coconut Authority (PCA), the SRA, the NFA, the National Irrigation Administration (NIA), the Land Bank of the Philippines, the Agri-Agra Law requiring all banks to set aside at least 25% of their loan portfolios for agriculture, and further support for inclusive financing through rural banks and microfinance institutions (MFIs), crop insurance, and the agricultural loan guarantee fund.
Had these implementing agencies been performing their mandates well, agriculture should not be floundering. Up to the last two years of the administration of President Gloria Macapagal Arroyo ten years ago, most of these agencies can claim lack of funds to rationalize their underperformance. But not anymore. Since the presidency of Benigno Aquino, and to date under President Rodrigo Duterte, lack of funds for Department of Agriculture (DA) and its agencies has ceased to be an excuse.
Let me illustrate with some examples:
The liberalization of rice imports by itself will bring down the price of rice to consumers but does not address the plight of farmers.
The problem all along with our domestic rice industry is two-fold: 1) our low yields and relative high cost of production, and 2) low income of farmers from rice alone, both of which can be ameliorated by further intensification of rice culture with high yielding hybrids and inbreds, and partial diversification to other high value crops. In both cases, farmers’ control over the timeliness and volume of irrigation water are crucial.
Unfortunately, the large irrigation systems are designed for rice and are ill-suited for the intermittent needs of water of the other crops. The obvious solution is to embed the small irrigation units (shallow tube wells, water pumps and farm ponds) being promoted and financed by the Bureau of Soils and Water Management (BSWM) into the large irrigation systems administered by NIA. Since both BSWM and NIA are under the DA, a single department order should suffice. Clearly no need for further legislation.
Just like rice, coconut suffers in 1) its low productivity versus its dominant competitor, the oil palm, and 2) low income of farmers from coconut alone. The four strategic technological directions are clear: 1) massive replanting with very productive indigenously-developed hybrids, 2) intercropping with other more profitable tree crops, 3) integrated, wet coconut processing at the village level to create more livelihoods in the country side and derive greater value added through processing of all parts of the fruit, and 4) market and product development support to the domestic oleo-chemical industry.
Again no further legislation or policy reform is needed for PCA to adopt this four-track modernization strategy. What are needed are 1) setting of targets, 2) intelligent program planning, 3) resolute execution, and 4) monitoring and feedback. All of these powers reside with the PCA board and its administrator (The utilization of the coconut levy funds is another story).
For access of small farmers to affordable credit, we have the Land Bank of the Philippines. With its annual net income of ₱15 billion which is ten times the annual General Appropriations Act funding for subsidized credit under AFMA, Land Bank can do much much more than what it is doing now. In the first place, Land Bank should reconstitute its original cadre of farm credit officers when it first started 50 years ago. These dedicated farm credit supervisors unfortunately were phased out when Land Bank became a universal bank to enhance its bottom line.
Instead of being required to remit half of its ₱15 billion annual income to the National Treasury, Land Bank may be exempted and allowed to utilize all its margins for subsidized rural credit as originally intended.
The commercial banks which are unable and/or unwilling to extend credit to small farmers, and hence unable to comply with the 25% Agri-Agra credit requirement may course their investments through Land Bank.
Again these courses of action are well within the existing powers of the executive and the authority of the Land Bank board and its president.
To be continued . . . Part 2
Dr. Emil Q. Javier is a Member of the National Academy of Science and Technology (NAST) and also Chair of the Coalition for Agriculture Modernization in the Philippines (CAMP).
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