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LEGISLATOR representing farmers has asked the government
to divert the remaining P5-billion fund of the
Agricultural Competitive Enhancement Fund (Acef) to
finance an intensified rice-production program and
jump-start a national effort to attain rice
self-sufficiency within a short term.
Party-list Rep. Leonila Chavez of Butil, also chairman
of the House Special Committee on Food Security, said
that on top of the P5-billion Acef fund, the national
government can draw from unreleased allocations under
the Agriculture and Fisheries Modernization Act (Afma),
estimated at around P50 billion in withheld funds since
1998, to complete the funding of a massive
rice-production program.
She said
funding a no-nonsense rice-production program would not
be a drain to the national government because of the
unused P5-billion fund under the Acef and the unreleased
portions of the Afma.
Meanwhile, as the government continues to turn to
importation to remedy the current rice crisis, research
group Ibon reminded it that rice imports do not result
in lower-priced rice.
The
private think tank said decades of importation has
proven that imported rice is not sold at cheaper prices
because private importers have the monopoly over pricing
and trading, while the government has withdrawn support
for marketing and distribution.
It said
prices are likely to be driven up by the recent decision
to remove the 300,000-metric ton (MT) quota on
private-sector rice imports because it paves the way for
profiteering.
The
government has said the NFA will remain the “importer on
record” so private-sector importers will not have to pay
the current 50-percent tariff. Importers will just be
charged a P2 to P3 “importation service fee” which, the
Agriculture secretary was quoted as saying, “[reduces]
the tariff to about around maybe 10 percent.” The NFA
will also supposedly determine import volumes.
Under
this scheme, Ibon said rice imported at $700 per MT
could be sold at P35.40 a kilo or higher—broken down
into P29.40 import cost (at an exchange rate of P42 to
$1), P3 NFA import fee, P3 storage and distribution
cost. This amount does not yet include traders’ mark-up.
If rice
is imported at $1,000 per MT then its domestic price
could rise to P48 a kilo or higher with traders’
mark-up, Ibon said.
The
worst hit are the poorest four-fifths of Filipinos
trying to live off P110 or much less a day and for whom
food takes up half to over two-thirds of their expenses,
Ibon said.
The
research group said the poor have already seen their
real incomes fall by 5 percent to 13 percent from 2000
to 2006. Majority of them are the rice farmers pushed
more into bankruptcy with the flooding of imported rice
in the market amid sufficient local production of palay.
The
NFA’s reduced role in palay procurement and rice
trading, including setting price ceilings, left farmers
and consumers at the mercy of traders. Ibon cited data
showing the monopoly of the rice market is increasing,
with only 2,968 rice dealers and wholesalers as of 2006
compared to 21,000 in 1986. Meanwhile, NFA procurement
is only at 0.5 percent and distribution rate is only 6
percent of total production.
To get
out of this crisis, Ibon said the government should, in
the short term, start expanding land area planted to
rice, increase the NFA’s local rice procurement to 25 to
30 percent so it can effectively influence rice prices
in the market, provide sufficient production and price
subsidies to farmers, and recede from its commitments to
further liberalize agriculture.
At the
same time, Deputy minority leader and Akbayan Rep. Risa
Hontiveros expressed concern Tuesday over the NFA’s
ballooning debt, warning the public that the NFA is
actually relying on debt to feed the nation.
“Due to
its bad fiscal standing, the NFA is one of the
government-owned and -controlled corporations [GOCCs]
that posted an alarmingly high deficit for 2005 and
2006,” Hontiveros said in a press release. “According to
the Commission on Audit 2006 Annual Report, NFA’s
deficit grew from P34.46 billion in 2005 to P42.6
billion, the second highest among GOCCs.”
“It is
now not only a question of a global depletion in rice
stocks. The rice shortage here in the
Philippines
could also be triggered and accelerated by NFA’s bad
financial standing and the lack of resources to import
rice to augment our own rice stock,” she warned.
The
lawmaker said that while the government’s subsidy to NFA
steadily grew, it was insufficient because of the
increasing prices of commodities.
“According to the Freedom from Debt Coalition [FDC], the
subsidy from the national government grew by more than
100 percent, or from P900 million in 2003 to an
estimated P2 billion for 2008. But with the cost of rice
importation rising to almost P58.7 billion for this year
alone, NFA needs to find other sources of funds to
procure and distribute grains.”
“It thus
resorted to borrowing. However, since loans incurred by
the NFA are not given sovereign guarantees by the
government, they’re costlier to attract loan facilities
and lending institutions,” Hontiveros said.
Citing
an FDC study, Hontiveros said NFA resorted to
collaterized loan financing.
“What
this means is that NFA is borrowing more than what is
needed, and the differential is used to buy zero-coupon
bonds that are then used as collaterals for its loans,”
Hontiveros said.
Zero
coupon bonds are those bought at a price lower than face
value, with the face value repaid at the time of
maturity.
“What is
scary is that in effect, NFA’s finances depend on the
financial market. This means that whether or Filipinos
would have rice on their plates would depend on how
stable the financial market is,” she said. “If any
financial crisis that would have a direct impact on
NFA’s financial standing happens, then the grains agency
would have no money to import rice unless the government
injects more funds to NFA. Its financial status makes it
very vulnerable to speculation.” |
