Not about imports

“Import lovers” is a misplaced tag branded on those of us who have long argued for opening our rice trade—the last country in the world to do it, after three postponements over 25 years. It’s as if we are completely callous and unsympathetic to the plight of Filipino rice farmers, favoring foreign farmers over them.

Those critics miss the point. It’s not about getting more imports—even as that would be the natural immediate effect of removing absolute government control on trade. Rather, it’s about attaining an inherently stronger, competitive, resilient and profitable farm sector over the long term, and with it, prosperous farmers, who would not have to languish in poverty for decades. We’ve always held that this game-changing reform of removing government control over rice importation is the bitter pill we’ve long needed, to finally transform and modernize our agricultural sector, well beyond rice.

Our traditional approach to rice policy— where government controlled and restricted rice imports in the name of pursuing full rice self-sufficiency—has proven over the years to be a formula for failure. That it has been a failure is rather clear, yet certain loud voices are still asking that we reverse our tracks, turn around and go right back to that policy regime.

How do we know it was a failure? For one, it brought us no closer to self-sufficiency in our main staple. Instead, it led to an ever-widening gap between our domestic rice prices and those overseas. Back in the 1970s, Filipinos actually paid rice prices lower than the import price. But the subsequent shielding of the domestic rice industry from imports, seemingly inspired by a brief episode of self-sufficiency then, abetted a widening gap between domestic and international prices. By 1980, local prices were 11 percent higher. By 1995, Filipino consumers were paying 25 percent more for rice than their counterparts in the region did. At the turn of the century, the gap had grown to 87 percent, and since then, we’ve paid up to 2-3 times what consumers in our neighbors did for the staple.

This all means that through four decades, we increasingly became more costly producers of the commodity. Government saw little impetus to be assiduous in helping domestic rice producers improve their productivity and cost competitiveness, from the farmers to the millers. They were, after all, shielded from competition. Higher prices through trade protection, rather than effective productivity-raising support, became government’s primary tool to help rice producers. The policy regime not only bred complacency, but it also bred corruption and smuggling, which became more and more rewarding as the gap between domestic and import prices grew wider.

Worse, this age-old policy regime kept our rice farmers persistently poor. Most were hampered by low productivity, with lack of access to credit being a primary barrier to applying productivity-raising inputs. At the same time, growing volumes of smuggling, the profitability of which rose over time as the domestic-international price gap widened, were hurting the farmers as well.

Meanwhile, we had made our staple so much more costly than it needed to be, crowding out nutrient-rich foods from the diets of our poor, whose limited food budgets were taken up almost entirely by rice. Our higher rates of severe malnutrition seen in stunting, with its lifelong damage to our poor children, ultimately trace to the failed rice policy regime, which inadvertently proved to be antipoor and rendered millions of Filipinos food-insecure.

There is now a clamor from certain quarters to return to all that, after we’ve taken the bitter pill that will push government and producers toward doing the right things to finally bring our rice farmers to greater competitiveness. What we need to do now is wrap sugar around that bitter pill, with outright cash assistance to aggrieved rice farmers as necessary, and have the patience to wait for the bitter pill to do its work.

Turning back will not help farmers—not now, not in the future. It will only condemn them to more of the same poverty they’ve endured for decades, and deprive them of this one chance for true change.

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