1-Man Wrecking Crew! Dominguez Brainchild RTL Ruined Phil. Rice Industry

There is only one person who should take all the blame for the Rice Crisis that the country is facing today making life difficult for poor families who could hardly afford to buy rice now priced at P50 to P60 per kilo.
He is no other than the head of the Economic Team of the previous administration, former Finance Secretary Carlos G. Dominguez, the brains behind the Liberalization of the Philippine Rice Industry.
It was the irascible and arrogant Dominguez, exploiting his closeness to President Duterte who was his elementary school classmate, who railroaded the “unimpeded” entry of imported rice in spite of the opposition from the National Agriculture and Fisheries Council, farmers groups and the Department of Agriculture.
His arguments were simple, if not naive.
“Flood the market with the cheaper imported rice and prices will go down by P7 per kilo while the tariff collected will benefit farmers” was the argument he made to convince President Rodrigo Duterte to sign into law the Rice Liberalization Bill known as the Rice Tariffication Law (RTL).
As proof of his disdain for Filipino rice farmers, I heard him several times declare: “This is a no-brainer. It’s 100-million consumers against 5-million farmers,” a suggestion that the rice farmers could be sacrificed just to give consumers affordable rice.
In the last ditch effort to explain to President Duterte the pitfalls of the Rice Tariffication Law, there was a dialogue held in Malacañang between me and the farmers’ group, on one hand, and Dominguez and the Economic Managers.
Dominguez was so empathic with his arguments that he was able to sway the traditionally Pro-Farmer President to approve the RTL in spite of my opposition as Agriculture Secretary.
I saw the pain in President Duterte’s face as he declared his decision to sign the enrolled bill but the arguments presented by the Economic Team led by Dominguez were so convincing.
Kung hindi lang malalim ang pang-unawa ko sa isyu, pati ako makukumbinsi.
To make things clear, the farmers group and the DA NAFC were not against Rice Importation because Filipino farmers were not producing enough rice for the needs of the country.
The farmers’ group only asked that government, through the National Food Authority, should have continued regulatory and supervisory powers over the Rice Industry.
They also asked that in order for the local rice farmers’ sector to be protected, there should be a graduated Tariff Schedule where during the local harvest season, there would be a higher tariff to discourage importers from flooding the market with cheaper imported rice thus pulling down farm gate prices.
Inversely, during the lean months, Tariffs could be lowered, or even Zero Tariff in times of crisis such as the one the country is facing right now, to encourage importers to boost local supply.
I had also warned that flooding the local market with imported rice will dampen the planting intentions of our farmers thus affecting local production.
It was also emphasized that it would be dangerous to rely heavily on imported rice because there is no assurance of sustained supply as the exporting countries also have growing population.
Climatic aberrations could also affect the rice production of exporting countries and when there is a shortage of rice in the world market, an import-dependent Philippines would suffer.
Parang tinaga sa bato ang sinabi ko because this is actually what is happening right now with India banning rice exports equivalent to 40% of the world supply.
Dominguez, however, wanted to take out government supervision over the rice industry and allow the ‘Unimpeded” entry of imported rice by doing away with the import permits, just the phyto-sanitary certification and payment of tariff.
This virtually surrendered the Rice Industry to importers and traders who now control the market supply and pricing of the staple food of Filipinos.
Without the NFA supervising the importation, Premium Rice (5% Broken) were brought in instead of the lower priced 25% Broken but were declared as 25% Broken to enjoy lower tariff, a virtual technical smuggling.
Since the importers brought in Premium Rice which they sold at higher price, the promised reduction of the market price of rice by P7 did not happen.
In fact, prices shot up from P38 per kilo (before the fake Rice Crisis of 2018 to justify the passage of the RTL) to over P50 now.
The damage to the local rice industry soon followed as Importers, many of whom are also local rice traders, opted to import rice rather than buy from local farmers because they generated bigger profits.
Soon, local traders also resorted to importation and many local rice mills closed down resulting in very low farm gate price for local rice, at some point as low as P12 per kilo.
Local productivity was adversely affected as many farmers abandoned rice farming as shown by the production data of 2019, the year the RTL was approved. (Please see attached graph.)
From a supply shortfall of only 800,000 metric tons in 2017 when the country posted its first historic high harvest of 19.28-million metric tons of paddy rice, the country now imports up to 3-million metric tons.
To be able to catch up with the rice requirements of the population now, there is a need to plant rice in at least 500,000 hectares of new areas.
This crisis is the result of one man’s idea of solving a Food Security Problem using the Free Market formula.
#RepentanceComesLast!