Rice control: Hard to let go

No sooner had President Duterte signed the Rice Tariffication Act (Republic Act No. 11203) into law, than oppositors of this long overdue and game-changing reform sprang into action to fight it, with some threatening to bring the matter to the Supreme Court. As is well-known, the law culminates a decades-old policy debate that continued into and within the Duterte administration. Also well-known is how the economic managers in charge of overall economic planning, finance, budget and management, trade and industry, and monetary policy prevailed over the agriculture secretary on this contested measure.

RA 11203, notwithstanding its name, means to achieve much more beyond simply converting past quantitative rice trade restrictions into more transparent import tariffs: It aims to open and widen competition in the Philippine rice industry to build its inherent strength, and reduce the cost of the staple for everyone, especially the poor and hungry. Most of the economy had already been similarly liberalized internally and externally, since the overthrow of the Marcos dictatorship that had fostered crony-controlled monopolies and cartels at the expense of the majority of Filipinos.

Liberalization and greater competition gave Filipinos wider choices and better quality of products and services, as it had done earlier in dynamic economies of Asia. Today’s millennials never knew how it was to have to count years to get a telephone from then monopolist PLDT (whose services were anything but good); when air travel under the PAL monopoly was affordable only to the moneyed; and when one had to travel to Dau, Pampanga, or visit Cash & Carry in Makati to be able to buy an array of imported consumer goods leaked out from the US military bases.

Liberalization and greater competition gave us all lower and more stable prices disciplined by the world markets, thereby leading to generally lower inflation rates since the 1980s and early 1990s, when they were in the double digits. Liberalization and greater competition also pushed domestic industries to shape up into greater productivity and competitiveness, turning erstwhile whining and over-aged import substituting “infant industries” into proud world-class exporters. Meanwhile, government was pushed out of complacency, learning to truly support and empower domestic producers, rather than rely on high trade walls to fend off competition, but abet inefficiency in the process.

I know that in pushing for more open rice trade domestically and internationally, our economic managers have in mind the greatest good for the greatest number of Filipinos, not being “import lovers,” as they are often unfairly branded. I also know that our agriculture authorities worry of the plight of an estimated 2.1 million rice farmers and their families, whose welfare cannot be sacrificed even as the lot of 101 million consumers, especially some 22 million poor ones, would stand to improve.

RA 11203 gives government the tool to shift away from a “shotgun” policy that brought the collateral damage of high prices on 101 million consumers in order to help the 2.1 million rice farmers. With about P10 billion in a Rice Competitiveness Enhancement Fund (RCEF) from expected rice import tariff revenues, government could now pursue rifle-focused assistance to the latter, while improving the welfare of the former.

I see a curious mix of at least three groups opposing the opening up of rice trade via the Rice Tariffication Law. First are those who seemingly trust government so much to want it to maintain absolute control over rice supply (even as this has time and again proven misguided and often disastrous)— yet don’t trust it to spend the RCEF properly and effectively under the arguably superior policy reform. Second are those who reaped fabulous windfalls under the old order, and refuse to let go. Third are those who, regardless of merit, will oppose any policy promulgated by President Duterte.

I applaud the many out there with a constructive mindset to help make the new policy fulfill its promise to promote the greater good and achieve a stronger and more diversified Philippine agriculture — rather than undermine or sabotage it.

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