Of rice and rice woes

The response of the Arroyo administration on the rice crisis is to liberalize the importation of this commodity. As a temporary solution to the crisis, this move could prove effective. By flooding the market with millions of sacks of this staple the supply is likely to stabilize, and hopefully, the price too. But more rice does not necessarily mean cheap rice. As long as the price of oil remains high farm products would become more expensive too.

One disadvantage about importing rice is that we will continue to subsidize foreign farmers to the disadvantage of our own. This of course will discourage our farm hands from producing more rice, which means that we have to continue buying rice from abroad to cover the shortfall.

With the effectivity in 1995 of our commitment to WTO on free trade, the Philippines was exempted for 10 years from opening itself to the inflow of foreign rice. To implement this regulatory measure, rice importation was subjected to quantitative restriction (QR) with the NFA tasked to determine the quantity of this commodity that could be brought into our ports. With the expiration of this exemption in 2005, the Philippines requested for extension but to date no such extension has been granted.

As far as some economic planners are concerned, however, QR or no QR does not make much difference because they are convinced that there is a need to liberalize our rice trading policy. Besides, what’s the use of restriction when we are not producing enough rice to feed our people?

For consumers, a liberalized rice policy is a better approach because this would mean cheaper price. This is so because the cost of production in foreign farms such as Vietnam and Thailand is less than that in this country. But to local farmers this practice is a heartache, that’s why many farm lands have been converted to usages other than rice production. The result is a diminished rice outputs which necessitates the outsourcing of about 2.5 million metric tons of rice annually.

Under the WTO agreement, the 10-year exemption from free trade for rice was supposed to be our grace period during which we were expected to embark on all-out efforts to upgrade our agricultural industry. Funds were supposed to be poured into the agricultural sector to upgrade irrigation, modernize farming technology, expand facilities, improve port-harvest mechanism — in short, to bring up our rice production into a globally competitive one. But those efforts must have been less than adequate. Funds were allotted, to be sure, but either these were insufficient or expended irregularly because the state of rice production has remained almost as it used to be.

There are factors other than free trade that are responsible for the continuing decline of our country’s rice production. One of these is the CARP of the Department of Agrarian Reform. Under this program large parcels of land were broken up into a number of hectarage for distribution to landless farmers. As a result, thousands of farmers got their share of agricultural land, which was a good thing. But lack of funds prevented these new landowners from making their farms productive. Another negative result of CARP was the conversion of rice lands into sites for non-agricultural endeavors such as residential subdivisions, shopping centers or others to make these areas outside the coverage of the program.

In the recently concluded Food Summit, one of the recommendations was to extend the implementation of CARP under a “reformed” status. Given an all-out support from the government a revitalized agrarian reform program may yet prove effective in solving our declining rice outputs. But is such support forthcoming? Many are skeptical. After 20 years of land reform the agricultural miracle envisioned by the godfathers of CARP has remained an illusive dream. Several administrations have come and gone, but little has happened to make the dream come true. Will the present crop of leaders be able to do it? Looking at the unceasing mudslinging among these people, there’s little reason for optimism.

Another recommendation is for the government to embark on a sincere emergency food and job program for the poor. A related proposal is “to dismantle food cartels” and jail big-time hoarders and smugglers. Again, do our leaders have the political will to do these?

In the meantime, there’s no other recourse but to allow the continued inflow of foreign rice into the country – even if this would cost us billions. Without such measure a nationwide disaster is in the offing.

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