FINDING ANSWERS
By FORMER SENATOR ATTY. JOEY D. LINA
Atty. Joey D. Lina
Former Agriculture Secretary Leonardo Montemayor, president of the Federation of Free Farmers (FFF), clearly pointed out the irony: Amid P10 billion in benefits are losses amounting to P130 billion.
Montemayor, who was studio guest in my DZMM teleradyo program Sagot Ko ‘Yan last Sunday morning, was describing the perilous situation many rice farmers are now experiencing with the implementation of RA 11203 or Rice Tariff Law.
The impact of the new law which took effect last March has been quite devastating for the local farmers who are incurring mounting losses, estimated to reach a staggering P130 billion by the end of the year, due to falling prices of palay amid the unimpeded deluge of imported rice.
The Rice Tariff Law has been touted to be some sort of magic bullet to help both the farmer and consumer. Yet months after it took effect, many feel the situation seems to be turning into a nightmare.
As early as June or three months after RA 11203 took effect, the Philippine Statistics Authority reported alarming data: Farm gate prices of palay were falling dramatically while consumer prices of rice hardly moved.
National retail prices at that time showed well-milled rice was being sold less by merely around 2%, from an average of P44.12 in 2018 to P43.10 for the same period this year. Regular milled rice was priced lower by just around 4%, from P40.37 to P38.72. The decrease in retail prices is virtually insignificant if one considers that the country’s economic managers have been saying that under the new law, rice prices would drop to as low as P32 per kilo or even P27/kg.
But the drop in palay prices is significant and is leading to heavy losses for farmers. The alarm was first raised in June when the PSA report came out. In Region 2, for instance, farm gate prices for dry palay dropped by around 29%, from the P23.00 to P16.40, while fresh palay dropped by around 37%, from P17.00 to P12.40.
And last September, published reports revealed that “farmers in Nueva Ecija, Isabela, and Ilocos Norte provinces said the average farm gate price of palay had dropped to as low as P7 per kg” which was way below the production cost of P12.45 per kilo. The reports added that many rice traders and millers have stopped buying local grains because of so much imported rice coming into the country.
Reports are also persistent that huge profits are being made in rice trading. “It is the trader who is making profit at the expense of both the farmer and the consumer,” according to Alyansa Agrikultura chair Ernesto Ordoñez.
Montemayor said the FFF estimate of around P130 billion in farmers’ losses for 2019 is similar to the projection made by government through the Philippine Rice Research Institute (PhilRice) which recently reported that P61.77 billion in losses have already been incurred by farmers. A published report stated PhilRice “said the plight of local planters may even worsen as their losses could balloon to nearly P130 billion if prevailing farm gate prices will continue to fall below production cost.”
A Rice Competitiveness Enhancement Fund (RCEF) is provided under the new law to make local rice farmers “globally competitive” by allocating P10 billion annually over a six-year period as support for farmers through rice farm machineries and equipment (50 percent), rice seed development, propagation, and promotion (30 percent), credit assistance (10 percent), and extension services (10 percent).
But Montemayor pointed out that P10 billion is hardly enough compared to the P130 billion in losses. He said rice farmers should have been prepared first, especially in areas of mechanization, to tackle the difficulties brought about by the new law before it took effect.
Amid the crisis hitting our farmers, Agriculture Secretary William Dar has acted quickly to ease their burden. He asked provincial governments to participate in economic enterprises by allocating P200 million each for palay procurement and buying palay at P17/kg directly from marginalized farmers. He also facilitated a P1.5 billion fund to provide needy rice farmers with a zero-interest loan of P15,000 from the Land Bank, payable up to eight years.
And President Duterte has apologized for government’s shortcomings, saying he’s ready to meet with farmers’ groups and act on their concerns. “What I am saying to our people is that, do not despair, we can always correct a wrong. I apologize to you if the result you wanted to get during the early days of my administration has been well delayed or not good, not to your expectations. If I can’t help you, then I have no business being here. I have the goal, I will immediately do something about it,” he said in an ABS-CBN interview aired last Saturday night.
Indeed, finding out what exactly has led to the current situation and being determined to put in place corrective measures can go a long way in addressing the crisis.
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