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Rice crisis may intensify under ASEAN Integration 2015

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Given the continued rice importation and the problem of rice cartel in the Philippines, the rice crisis may intensify as the country moves towards the ASEAN Economic Integration by 2015. 

While the country recorded its highest rice production in 2013 at 18.4 million MT, this represented only about 96% self-sufficiency, consequently compelling the government to procure from the international market to supply its shortfall, according to ArzeGlipo, executive director of the Integrated Rural Development Foundation  (IRDF).

“The Philippine agriculture sector which experiences low productivity, limited mechanization, weak infrastructures such as irrigation systems, low research and development and the propagation of science and technology knowledge, poor and underdeveloped agri-processing cannot compete with its Southeast Asian neighbors”, said Dr. ReneOfreneo, former labor undersecretary and dean of the University of the Philippines School of Labor and Industrial Relations.

“Filipino rice producers are way backward compared to their Thailand and Vietnam counterparts who enjoy government support aside from having good irrigation and cheaper inputs,” Ofreneo said.
Ofreneo, also IRDF’s Board of Trustee chair, pointed out that among other Asian countries, strong state support for agriculture has fueled their economic growth.  

“Thai rice subsidy in 2013 is US$4Billion. In contrast, the Philippine government in 2014 only allocated Php4.25 Billion as subsidy to NFA, while the agency allocated Php10.3 Billion for rice importation making (National Food Authority) NFA’s importation continually financed through commercial loans that are bleeding the agency’s coffers dry due to high interest paymentsaside from the rent-seeking transactions involving NFA officials and traders,” Glipo added.

She argued that the NFA, as a government-owned and controlled corporation (GOCC) mandated to support farmers and ensure food security and stabilizefood supply and prices, has not been able to influence the price of palay and rice.For the past years, it was only able to procure about 1% of the total palay production of farmers. Its rice distribution could not meet the rising demand especially of the poorer households who need the most of NFA rice. NFA clearly has insufficient subsidy to finance its stabilization functions. 

This year, a total of 1.8million MT of rice have been targeted for importation. In an attempt to stabilize prices, the National Food Authority (NFA) is currently importing 50,000 tons of rice from Thailand and Vietnam for the last quarter of 2014.In 2015, rice imports are forecast to reach 1.7 million tons. 

“With the escalating rice prices, realizing food security, especially under this ASEAN Economic Integration, continues to be a huge challenge for the government as high rice prices drive up food inflation,” Glipo said.

Leaders of ASEAN member countries announced the establishment of an ASEAN Economic Community in 2015 by transforming the region into a single market and production base with free movement of goods, services, investment, skilled labour, and capital in order to compete the global market.

Under the ASEAN Investment Area, all industries, including agriculture, fisheries, forestry and extractive industries “shall be open and national treatment granted to investors” both at the pre and post-establishment stages, although with some exceptions, according to the ASEAN Economic Blueprint. 

“Our rice production has been confronted with problems on NFA procurement, food price increases, backward agricultural mechanization aside from the several natural disasters we have experienced. Given our current situation, hindinamin kaya makipag-compete under ASEAN Integration nahindinganaminnaiintindihanngluubusan,” said Nestor Diego, secretary general of the PambansangKaisahanngmgaMagbubukidsaPilipinas (PKMP). 

“This year’s Wold Food Day recognizes the important role of farmers in securing food. The theme which is “Family Farming- Feeding the World, Caring for the Earth” is a strong pronouncement to promote and protect our sector. We are smallholders but the most efficient mover of solving the food crisis while maintain ecological balance,” Diego said.
APNFS, IRDF and the UPSOLAIR-CRSS present the following recommendations: 

The Roadmap towardsNational Food Security
1. Strengthen NFA Mandate on Food Security and Stabilization 
To enable NFA to perform better its core mandate, the national government should allocate a higher budget and subsidy. NFA’s palay procurement should be able to cover at least 7% of the total rice output which will entail a budgetary allocation of P22.6 Billion.

NFA’s role is even more important given the current context of continuing uncertainty in the international food market. Government must continue to exempt rice from Quantitative Restrictions and start the review process on trade liberalization commitments to the WTO, AFTA and other free trade agreements.
2. Rice self-sufficiency should begin now, not in 2016
With asset reform and the right support incentives and policy governance, small farmers can become leaders in agricultural development. Improved irrigation systems, seeds, sustainable farm inputs and access to credit can dramatically increase harvests and incomes of poor farmers, alongside access to efficient storage and post-harvest facilities. 

The R&D in agriculture need to be optimized towards promoting science-based, farmer-oriented and agro-ecological sustainable systems which contribute to raising agriculture productivity, creating value and promoting ecological balance.The Philippine organic farming program, a mandate based on the Organic Agriculture Act of 2010 has to expand on a nationwide scale.

Government must ensure that agricultural machineries increase farmers’ participation that contributes to their empowerment by improving their labor productivity, farm labor condition, economic capacity, and well-being. It should also encourage younger generations to engage in sustainable farming. Government should conduct community-level consultation with active participation of smallholder farmers as machinery users. 
3. Revive and rehabilitate the coconut industry and utilize the Coco Levy Fund
There are about 3.4 million coconut farmers and farmworkers who receive minimal support from the government. Coconut production experienced decline over the years and was recently affected by pest infestation making poverty incidence the highest in regions with the largest land area for coconut.

Reviving and rehabilitating the coconut industry would require increasing and strengthening coconut farmers’ control over the value chain such as production, marketing and distribution of coconut products to enable them to get a better share.

The coconut levy fund, which has been declared by the Supreme Court as public fund should be utilized to rehabilitate the coconut industry through productivity raising programs, financing agro-processing and value-adding enterprises, and strengthening farmers’ control over the industry through cooperatives and farmer-owned economic enterprises.

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