Farmer leaders from the Federation of Free Farmers (FFF) expressed shock over the recent admission of Assistant Secretary Mercedita Sombilla of the National Economic and Development Authority (NEDA) that the government has not yet firmed up its contingency plans in the event palay buying prices decline significantly as a result of the Rice Tariffication Law. The law was signed by President Duterte in February and is slated to become effective on March 5, 2019 upon the issuance of the Implementing Rules and Regulations (IRR).
During the IRR consultations in Iloilo City last March 1, 2019, Sombilla was asked what the NEDA and the government as a whole would do in the event the palay buying activities of the National Food Authority (NFA) would not be able to arrest a decline in prices brought about by the influx of cheap imports. “Sombilla replied that they were still studying the matter,” said Raul Montemayor, National Manager of the FFF, who posted the query.
“This is the height of ineptitude and negligence on the part of NEDA, the highest policy making body in the government and the main proponent of the tariffication law in the executive branch. They were saying all along that rice prices would drop due to cheaper imports, so they also knew that palay prices would go down proportionately. But now a top NEDA official is saying that the government does not yet know what to do in case palay prices drop significantly. And yet NEDA has been pushing aggressively for the early issuance of the IRR so that importers can start bringing in cheaper rice.”, said Montemayor.
Montemayor noted that practically all farmers who attended the four consultations conducted by the DA have clamored for the maintenance of the NFA’s price support program for palay to shield them from the expected decline in prices brought about by imports. However, it remains unclear if this is consistent with the tariffication law, which appears to allow NFA to buy local palay only for purposes of accumulating buffer stocks. “Even assuming NFA is allowed to buy more to prop up palay prices, there is no assurance in the IRR that the agency will be given enough funds. For 2019 for example, NFA was given a budget of only P7 billion which is good for only half of the minimum 15-day buffer stock.”, added Montemayor.
Montemayor explained further that the tariffication law also took away NFA’s capacity to borrow money with government guarantees. The government can impose a so-called safeguard duty on top of regular tariffs if imports exceed a certain level. “However, the additional tariff is small and can be applied only for a few months. WTO rules also allow countries to temporarily block imports if they cause undue harm on domestic producers, but the tariffication law seems to have taken out this option too.” , said Montemayor.
Meanwhile, Ruben Presilda, President of the FFF, decried reports that NEDA Secretary Ernesto Pernia had reprimanded DA Secretary Emmanuel Piñol for allowing farmer leaders to criticize Senator Cynthia Villar during the IRR consultations in Lipa City last February 27, 2019. Senator Villar, the Chairperson of the Senate Agriculture Committee, was the main sponsor of the rice tariffication bill which was eventually signed into law. Farmer leaders have pointed to potential conflicts of interest given that Villar’s family is actively buying and converting agricultural land for development into subdivisions, malls and other non-agricultural purposes. Questions were also raised as to why she allocated P700 million per year to the Technical Education and Skills Development Authority (TESDA) given that TESDA is a major partner of the Villar Foundation’s SIPAG program. In comparison, the DA’s primary agencies in charge of agricultural training and extension were given only P100 million each. “We farmers have a right to express our views and misgivings about what Senator Villar has done, specially because she did not give us a chance to air our views during the Senate hearings on the bill. As an elected senator who is now running for re-election, Senator Villar is answerable to the people. It is only proper to let her know that many farmers are angry at her and doubtful of her motives. In the IRR consultations, we were clamoring for clear provisions that would address the harm that the tariffication law that Villar authored could inflict on farmers. Secretary Pernia has no right to tell us to shut up.”, explained Presilda.