WHY are the government’s policy prescriptions aimed at guaranteeing food security for Filipinos either wrong or absolutely wrong? Raul Montemayor, who delivered the 2022 JV Ongpin Memorial Lecture in Business and Government at the Ateneo Professional Schools on Friday, October 21, was straightforward on the why. Farmers, the main cogs, the principal players, in that effort have always been left out in the determination of those policy approaches. Historically, the policies enacted, codified and implemented have all missed out the farmer-centric, farmer-focused policy imperatives that should drive and undergird successful food-security programs.
Instead of vesting farmers with the production wherewithal and tools to produce adequately for national needs at prices citizens can afford — the support they need — food-security policies always opt for the lazy policy of great folly — importation. Which is, in many ways, not only an easy way out but also a Hobson’s choice. Cheap food stuff for consumers, with farmers as the sacrificial lambs. That cruel trade-off, also an unimaginative one at best, does not even work, according to Montemayor.
“In an ideal world and within the sanitized confines of computerized econometric models, these theories would probably work. But reality is very different. Cheaper imports do not guarantee prices will go down,” he said. His group, the Federation of Free Farmers (FFF), has been at the lead in debunking all the neo-liberal bunk that has influenced the shaping of major food and agricultural policies.
Exhibit A is the 2019 fast-track passage of the Rice Tariffication Law (RTL) that scrapped the historic protection called the quantitative restriction on rice and substituted the QR with tariffs on imports. The deregulation of rice imports that started in early 2019 with the passage of the RTL indeed flooded the domestic market with rice as orgies of reckless importation driven by greed became the norm. In just 10 months of 2019, rice imports recorded a historic high of 3.1 million metric tons.
The codification of rice imports had predictable, but depressing, results. Retail rice prices barely moved but farmers suffered heavily, Montemayor said. Tracking the “benefits” to ordinary rice consumers and the heavy losses of shell-shocked rice farmers in a six-month rice production cycle, this was the FFF’s gain-loss table. In that six-month period, the benefit to a rice consumer was P26. Farmers’ incomes dropped by P4,650 per hectare.
“In effect, the benefits from liberalization were captured by the market intermediaries, with practically no gains for consumers and at a huge cost to millions of Filipino rice farmers,” Montemayor said in his JV Ongpin Memorial Lecture speech. Simply put, the RTL was passed by Congress for importers and traders and the usual profit-seeking suspects.
When the benefits from a liberalized regime of rice imports, now the lay of the land, are captured by just a select group of market intermediaries, another pillar, another critical component of food security falls by the wayside. That is affordability, Montemayor said. The massive rice import dumps since 2019 have not made retail rice prices any cheaper and within the purchasing power of the teeming urban poor while exacting huge losses on rural rice farmers. In the final analysis, the RTL’s passage and the rice trade liberalization have even failed to fulfill its Hobson’s ugly predicate — that the farmers’ huge sacrifice would benefit ordinary rice consumers via affordable rice.
Even if the flood of food imports were to translate into cheap and adequate food supplies, with consumers reaping true benefits, “it is still foolhardy to rely too much on foreign countries to supply our essential food requirements,” according to Montemayor. Because food-exporting countries will always prioritize their own citizens over the needs of other countries. And there are signs of tightening up and supply disruptions, he said. Montemayor then gave the attentive crowd at the JV Ongpin Memorial Lecture snapshots of a world whose food supply chain has been disrupted by Vladimir Putin’s unhinged dream of a Soviet imperium via the subjugation of Ukraine. (The two supply a quarter of the world’s wheat exports and are both major corn exporters. Russia used to be the biggest source of global fertilizer needs. Ukraine used to be the No. 1 supplier of sunflower oils and seeds.)
India has imposed a 20 percent tax on rice exports. Thailand and Vietnam, sources of more than 80 percent of our rice imports, are planning to fix a price for their rice exports, a cartel-like price-fixing, instead of competing, which would lead to price increases, which in turn would grievously hurt rice-hungry nations like the Philippines. China, while not mentioned, has built a huge foreign currency reserve that can quote the most attractive tender for any food supply it needs from the global food market. In a tight food market, not one country can compete with China.
Add to this mix “wars, calamities and external events over which we have no control,” Montemayor said. From these developments, we see the Philippine dilemma: either restricted access to these food exports or higher prices for such goods.
Even a case of cheap food items flooding the Philippine markets from massive dumps overseas will not even be good for Philippine agriculture, he said. “The more we allow imports to displace local production, the less incentive for our own farmers to continue producing and becoming more efficient, the more dependent we become on foreign suppliers for our basic food requirements.”
Montemayor’s speech was a broad, comprehensive take on how to get to the path of food security and the central theme was this: Agricultural renaissance is a journey of a thousand miles, a tough slog. The first step should be focusing the attention of development programs on the farmers, the main actors, the principal players, not the usually inordinate focus on specific food types and sub-groups. I hope to write about the topics this piece missed in future columns.
Taking note of civic spirit is something I rarely do. But the gesture on the part of Maribel Ongpin to invite a farmer-leader to talk in-depth about agriculture and food-security issues, from the lectern of the JV Ongpin Memorial Lecture, was truly admirable. Ma’am, mula sa aming mga magsasaka, maraming salamat po.