The P10-B panacea
Credit to Author: MARLEN V. RONQUILLO| Date: Tue, 12 Feb 2019 16:45:54 +0000
THE promises of the measure passed on rice tariffication, the congressional measure that ended the quantitative restrictions (QR) on rice imports, are many. But the major argument has been this: That the 35 percent tariff to be imposed on imported rice will be passed on to farmers, fully and without impairment. The so-called “inefficiencies” of the rice market system will disappear once the National Food Authority (NFA) is out of the picture. And without the NFA and the other intermediaries in the importation process, the tariff proceeds would be intact and farmers would fully benefit from these.
Even some supposedly prominent economists have solidly supported tariffs in lieu of restrictions on the import quantity.
In the approved measure up for signing by President Duterte (some say he has already signed the measure), at least P10 billion — drawn from the tariffs collected — will go directly to support the small rice farmers yearly, who, as sure as the sun rises in the east, will suffer from the end of QR. According to the economists, the measure, once signed into a law by Mr. Duterte, would immediately accomplish three things: cheaper rice from Vietnam, Thailand and the other exporters on a sustained basis; the NFA, and its market-distortions, out of the picture; and, a guaranteed support fund for small farmers by way of the tariffs generated from the imported rice.
The money offering, at least P10 billion a year that, theoretically, would go directly to rice farmers, is the olive branch dangled to the farmers, the sector to be hit hard by the lifting of the QR and the beginning of the regime of “unli” rice importation.
But will things go as seamlessly and smoothly as what the framers of the tariffication law has promised? I am a small farmer and an old farmer at that. I have been through the many promises of government to farmers, including the ironclad guarantees that come with every program that, supposedly, were meant to benefit the small farmers. I am sure of one thing only. Nothing will come out of the tariffication law, the end of QR and the beginning of the regime of unlimited rice importation. And this view is shared by many.
Butil party-list Rep. Cecil Chavez has raised very important questions.
Will not the fund go the way of ACEF, lofty in theory but grossly ineffective in practice and real-life application?
What kind of institutions will oversee the fund? Will we see the same old, same old uninspired institution that we farmers are familiar with?
What are the modes of delivering the so-called direct support to small farmers?
I know where Cong. Chavez is coming from. All the special funds for farm support have either gone wayward or have been mismanaged. Not a single fund has been blemished by success. I repeat, not a single fund has been blemished by success.
Exhibit A is the Agricultural Competitive Enhancement Fund, the infamous ACEF.
The ACEF was a byproduct of the country’s accession into the World Trade Organization umbrella. In December 1994, on the date of the Senate ratification of the accession, a rosy scenario for the future of agriculture in general and farmers/producers in particular was laid down. Sustained growth for the sector. A better life for farmers and producer. Agriculture would recapture its lost glory etc. etc.
Like the money pool promised to small farmers under the rice tariffication measure, the ACEF is pooled from the tariffs collected from the crops and agri products whose importation was liberalized upon the country’s accession to WTO. Even with the liberalized tariffs, tens of billions of pesos a year in tariff collections guaranteed a solid and sustained money pool for the ACEF.
In theory, the ACEF should focus on the funding needs of small farmers and small agri producers. Because they are the ones that need real help and they are the ones that have been brutally savaged by ACEF.
In real-life application, the ACEF funding, especially because it carries no interest and the repayment terms are lax, has been diverted to the usual suspects: agri-business interests, well-connected charlatans, politicians and their cronies.
The small farmers, true to the story of a hundred years, never had access to ACEF funding.
The fund administrators, to rub salt on the farmers’ open wounds, have been blaming the farmers for the lack of access. The truth is the farmers cannot prepare the feasibility studies needed, the paper requirements and documentation needed because the fund administrators saw to it that small farmers are, from the get-go, excluded from the ACEF funding.
The ACEF administrators made sure that the papers and documentation needed are beyond the capacity of the small farmers to prepare.
This is the sum of the farmers’ fears. The P10 billion promised to small farmers under the rice tariffication will go the way of the ACEF — a fund that guarantees the exclusion of small farmers.
Somebody told me. Just wait for the IRR of the rice tariffication law. It might be different. This was my terse response. Are you familiar with the nuts and bolts of the Free Irrigation Law? My God, there is no mention of irrigators associations and ditch-tending. The rules were meant to guarantee chaos and confusion in the implementation.
Now, how can small farmers trust the P10 billion panacea under the rice tariffication measure?
A late-breaking development: Sources told me that 80 percent of the P10-billion will go to mechanization and a program by the Philrice, a research agency. The two chambers of Congress should look into this travesty.
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