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EVEN as
militant groups reject outright importing reduced tariff
rice as a solution to higher prices, some leading
economists believe the present situation calls for such
government action, especially since the Philippines is a
net rice-importing country.
University of the
Philippines
economist Solita Monsod noted that aside from the
obvious benefit of making rice affordable, removing
tariffs on rice will also benefit farmers themselves.
“There should have been no tariffs on basic commodities
in the first place. For one, most Filipino farmers are
net consumers of rice and a lot of our farmers are
subsistence farmers.”
Bienvenido Oplas Jr., an economist and chairman of the
nongovernment organization Minimal Government Movement
(MGM), said, “Tariffs make commodities that are meant to
be cheap become expensive.”
Oplas
noted that direct subsidy by the government through the
National Food Authority (NFA) by expanding its subsidy
allocation “will be costly to taxpayers.”
In Hong
Kong, Finance Secretary Margarito Teves said in an
interview with reporters at the Conrad Hotel that the
government is carefully studying the proposed
rice-tariffs reduction, as it is a “complicated” matter
that may branch into other issues and problems.
“We’re
looking at it from the standpoint of revenues. We have
to balance it from the standpoint of how sensitive it is
for the consumers. So on our part, it would be better if
we have tariff duty so I think it has to be an
integrated decision,” he said.
Various
farmers’ groups have expressed opposition to reducing
the tariff on imported rice or even possibly make it
zero duty.
The
militant fisherfolk group Pambansang Lakas ng
Mamamalakaya ng Pilipinas (Pamalakaya) said reducing or
removing rice tariffs would further strengthen the
invidious and much too influential rice cartel which has
been known to effectively manage prices to their liking,
and give unscrupulous government officials more
opportunity for kickbacks.
But his
more telling argument is that, “Rice is an P80-billion
local industry. Those who control the local production,
as well as the importation of rice, will surely control
local and national politics, since rice is a highly
sensitive and politically explosive product.”
Monsod’s
rejoinder is, “If the farmers are afraid of traders, why
don’t they form themselves into cooperatives and take
part in importation, just like what they did in Europe?”
Earlier,
President Arroyo had ordered the Department of Finance (DOF)
to reduce tariffs imposed on imported rice.
The
Philippines has been importing the staple, along with
other basic foodstuffs such as corn and wheat, since
local farmers are unable to produce the volume required
by a growing population.
Based on
the estimates of the National Statistics Office (NSO),
there will be 90.4 million Filipinos this year, or 18.2
percent higher than the 76.5 million in 2000.
Agriculture, according to the government, had so far
only advanced not more than 7 percent over the years.
Relatedly, Teves told reporters covering President
Arroyo in Hong Kong that the DOF may be open to further
subsidies to the NFA “from a very strict narrow sense”
as it is less complicated, but he added it may also
take a toll on government revenues if high rice prices
get too high and are prolonged.
“The
government would be burdened through the NFA. That is a
huge subsidy,” he said.
Teves
said the government must first determine how much the
private sector would be willing to import because if it
has no intention to participate, it would defeat the
purpose of the scheme as it would still be the NFA that
would import rice.
Agriculture Secretary Arthur Yap had earlier said the
proposed reduction of rice tariffs is not a “critical
priority” of the government because of its experience
last year, when it opened 400,000 metric tons (MT) for
importation by the private sector, but only less than
100,000 MT was imported.
Teves
added any tariff reduction on rice would have to be
preceded by hearings involving farmers’ organizations,
and that such a move may prod others to seek reductions
on other agricultural commodities.
“It is
important to determine the volume, the capacity of the
private sector, if a 30-percent (tariff), for example,
would be attractive to the private sector. If its not
attractive, it would just be an academic exercise. So
the data is important so we can decide on what we will
do, if it will remain at 50 percent, or reduce it to 20
or 30 percent. We have to anticipate the reaction of the
private sector,” he said.
Other
considerations, he said, would be the impact of a tariff
reduction on the selling price of rice. |
