Ang Bayan
September 21, 2018

Rice importation means death to small farmers

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Officials of the US-Duterte regime insist that the sole solution to rising food prices is extensive importation. For rice, in particular, state officials are pushing for the lifting of quantative restrictions (QR or the special treatment of rice which limits the maximum volume of rice the country can import) and the abolition of the National Food Authority. This will pave the way for the complete deregulation of rice importation which will authorize big businesses to directly import rice without limits.

In lieu of the QR, the regime suggests imposing a 35% tariff on imported rights, in accordance with the Philippines’ ASEAN obligations. This is set to be lowered in the years to come. According to Duterte’s officials, imported rice will lower local prices by P7/kilo or more, since imported rice is cheaper than local rice.

But according to studies by the reactionary state itself, this will immediately demolish the livelihoods of rice farmers. Since traders can buy imported rice at cheaper rates (landed cost of rice from Vietnam is at P27/kilo, transportation costs and tariffs included), local farmers will forced to sell palay at even lower prices.

Based on 2014 prices, palay farmgate prices would have to be lowered from P12/kilo to P7-8/kilo (or lower by at least P4.50/kilo.) Also in 2014, the price of Vietnam rice was just P9.92/kilo (excluding importation costs) while that of local rice was P19.24/kilo. This is supposedly due to the low cost of rice production in Vietnam which was at P6.53/kilo for every hectare of ricefield, compared to P12.41/kilo in the Philippines. Before new taxes were imposed this year, this would have meant a P18,240 or more than 30% cut in profits per hectare of ricefield. Thus, rice importation will push the already beleaguered farmer to further bankruptcy.

According to another state study released in 2004, the country will not benefit from the unrestricted and deregulated importation of rice. In fact, this will result in extreme hardship and dislocation of millions of rice farmers and the industries related to the subsector.
Rice production will fall, alongside farmgate prices. Milling operations and businesses will likewise fall. Demand for labor will go down and hundreds of thousands, if not millions, will become unemployed. There are approximately two million rice farmers in the country. As the subsector constricts, wages within it are expected to fall as well.

The same study also indicates that the fall in rice prices is way insufficient to balance out the destruction importation will bring to the largest agricultural subsector. Sixty percent of the Filipino family’s expenditures are spent on food. The poorest families spend up to 21% of their budget solely on rice. Nevertheless, a large number of these families (up to half in rural areas) rely on the production of palay and other food crops, and thus are in danger of losing their livelihoods. In the end, unrestricted importation will only worsen their plight.

AB (2018-09-21): Rice importation means death to small farmers