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Planting rice not anymore fun for Filipino farmers due to disasters, new ‘tariffication’ law

The rice liberalization law resulted in the country's "total reliance" on a very limited market for food security

Seemingly defeated, they kissed the ground, the mud, after the storm, hectares of them, rice plants not yet ready for harvest, a few kilometers outside the Philippine capital.

“A few more days and they will be all useless,” said Narcing Manalad who hired six farmworkers to harvest the still young rice grains in his farm in Bulacan province.

The seeds needed a few more weeks to fully develop, but the farmers were left with no other choice.

“This happens when a typhoon hits. You will lose everything you worked for,” said Manalad, who has been farming a hectare of rice that usually yields about 80 sacks of unhusked grain.

After the recent typhoons that hit the country, Manalad expected to get at least half the usual yield.

For his one hectare of rice field, the farmer had to spend up to 40,000 pesos (about US$800) from planting to harvesting.

He borrowed most of that amount from money lenders.

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“I loaned the seeds, fertilizers, and pesticides. For the cost of labor, I pay farmworkers with the produce,” he said.

“If I need cash, I also borrow from the money lenders or the traders,” he added.

“After the harvest, I pay my loans by selling the rice to the trader or the usurer who lent me the capital.”

The 59-year-old farmer has been doing it for decades now.

He would borrow capital from the trader on the condition that he would sell his rice at the price the trader wants.

The “farmgate” price of “palay” (unhusked rice grains) has not improved for the last three cropping seasons. “The price in Bulacan now is at 10 pesos per kilo,” he said. That’s about US$0.20.

The 10-peso per kilogram of “palay” is the price for the well-dried ones. The price would go down if the “palay” is a bit moist.

If Manalad could harvest at least 40 sacks of “palay” and sell it after drying, he would get not more than 24,000 pesos (a little less than US$500). “It’s not even enough to pay my debts,” he said.

‘Liberalization’ of rice prices

Rice farmers are among the poorest sectors in the Philippines, a country that mainly relies on agriculture.

Manalad said their situation “further worsened” after the government implemented the “liberalization” of the rice industry.

He said the price of “palay” went down to as low as seven pesos per kilogram after the passage of the “Rice Tariffication Law.”

Before the law, the price of “palay” even reached about 30 pesos per kilogram.

In February 2019, the Philippines passed the “Rice Tariffication Law” that removed the “quantitative restriction” or the ban on the import of rice from other countries.

In the process, the law lifted the sole authority given to the National Food Authority to import rice. It allowed private traders to import rice, provided that they pay the corresponding tariffs or taxes to the government.

Any amount of rice from countries belonging to the Association of Southeast Asian Nations can be imported at 35 percent tariff and at about 50 percent tariff for rice from non-ASEAN countries.

The influx of cheap imported rice in the Philippine market resulted in the steep dive in the price of “palay.”

Under the law, a Rice Competitiveness Enhancement Fund will be sourced from tariff revenues and at least 10 billion pesos should be allocated annually, for six years, to support local rice farmers.

The fund is supposed to be used for programs aimed at improving the competitiveness of local farmers and to augment their income amidst the liberalization of the rice trade policy.

The fund also aims to modernize rice production with the introduction of farm machinery and equipment and seed development.

Manalad, however, said that before the program could be implemented in the local level, the farmers are “already dead.”

He said the government should have implemented the program at least 10 years before it imposed the liberalization of rice trade.

“How will the farmers cope? Can we wait until the program reaches us and improve rice production to compete with cheap imported rice? We are already starving,” said Manalad.

He said some farmers have already started selling their farms.

In the town of Hagonoy, also in the province of Bulacan, Marita de Guzman sold her family’s 3.5-hectare rice land in June after suffering losses due to low farmgate prices.

“If we do not sell it, the bank will only take the land,” she said.

“We cannot afford the monthly payment of loans because the money from the harvest only covered the cost of production,” she said.

De Guzman also lost her job as a private school teacher due to the coronavirus pandemic.

“It was the only way to survive. Sell the land and use the money for business,” she said.

The land was sold to a contractor who plans to build a commercial warehouse in the area.

Narcing Manalad, a 59-year-old farmer in Malolos, Bulacan, hires workers to help him harvest rice in his farm that was devastated by recent typhoons that hit the country. (Photo by Mark Saludes)

Food security in peril

Danilo Ramos, chairperson of the Peasant Movement of the Philippines, said the rice liberalization law resulted in “total reliance” on a very limited market for the country’s food security.

He said only 9.7 percent of the world’s rice production “ends up in the global market,” adding that the world’s largest rice producers “allot most of their harvest for local consumption.”

Ramos said if countries, such as Vietnam and Thailand, where the Philippines imports rice, decide to stop exporting, or if the global supply diminishes, “we will end up with a rice shortage.”

“That is bound to happen, especially if the government will not address the issues that force farmers to sell their lands or use their lands for other purposes,” he said.

The liberalization of the rice trade only worsens the already weakened condition of the agriculture sector, said Ramos.

“The law discourages farmers from engaging in agriculture due to low income,” he said.

The situation results in “land-use conversion” that reduces local rice production.

The strong typhoons that hit the country in recent weeks left significant damage to the agriculture sector. (Photo by Mark Saludes)

Independent think tank Ibon Foundation noted that the country’s local rice production has the capacity to feed the entire population even without rice importation.

In 2018, the Philippines had 2.7 million metric tons of surplus rice from its local production “despite lack of government support for the sector.”

Ibon Foundation also reported that the self-sufficiency ratio of the country in the last 30 years is 91 percent.

“It is inconceivable therefore that the government is declaring that the rice-producing Philippines… should now simply rely on importation,” noted the Ibon report.

About 75 percent of the country’s total population belongs to the agriculture sector.

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