“The money that the government has been spending to effect a reversal of the decades-old official neglect of Philippine agriculture comes from the E-Vat.”
by Ducky Paredes
The E-Vat has actually helped us all. Because of the government’s ideal fiscal position (coming from the E-Vat collections), according to Agriculture Secretary Arthur Yap says that the government has been able to invest heavily in DA and NFA intervention measures meant to stabilize prices in the short term while boosting productivity—and the national sufficiency level—in the long term.
The government sourced more than enough rice from abroad to the point where, unlike in other countries which actually had food riots, we, in the Philippines, hardly felt the world-wide rice crisis.
(One sour note is that the government bought so much rice that the price of palay is so low that our rice farmers are hurting from the low buying price of their crop. Some are actually losing money on their crop. In fact, one study by academics suggests re-exporting some of the rice so that palay prices can rise.)
Our domestic prices are even lower than those in the world’s top rice exporters, Thailand and Vietnam, where the average rates are equivalent, respectively, to P56 and P67 a kilo. The stocks being sold by the NFA are among the cheapest state-subsidized rice in the region.
While stabilizing supply and prices through imports and the effective distribution of state-subsidized stocks in depressed communities underlined the short-term government response to the global food crisis, the long-term strategy has to do with further increasing public investments to rapidly raise per-hectare yields and enable the country to become at least 98% sufficient by 2010.
The money that the government has been spending to effect a
reversal of the decades-old official neglect of Philippine agriculture comes from the E-Vat.
Greater investments in irrigation maintenance, fertilizer and seed support, post harvest facilities, credit and market assistance, and agricultural extension work via the DA and NFA have enabled the Arroyo government to raise the per-hectare yield from 3.07 in 2000 to 3.80 in 2007, leading to the all-time-high national yield of 16.24 million MT.
The DA’s production target of an even higher 17.32 million MT for this year is on track, as preliminary field reports showed that the summer harvests have already reached 7.1 million MT from 1.88 million hectares planted to the grain during the dry crop.
More funds will be spent on the DA’s five-harvest plan to raise the rice sufficiency level to 98% by boosting harvests to 18.55 million MT in 2009 and 19.77 million MT in 2010.
In her last SONA speech, President Arroyo said that this sufficiency program will be partly funded from a P4 billion share of the royalties from the Malampaya natural gas project in Palawan. (This is another source of funds that some businessmen want scrapped to being down the cost of electricity.)
Yap has also proposed to the Palace that P3 billion from its “Katas ng Vat” subsidy program be set aside for the Land Bank of the Philippines to guarantee loans secured by farmers for their production inputs beginning this wet crop.
During the DA-hosted National Food Summit last April 4, President Arroyo unveiled her ambitious FIELDS program to further perk up farm productivity and help cushion the impact of the global food crisis on ordinary Filipinos. (FIELDS stands for Fertilizer, Irrigation and farm-to-market roads, Education and extension work, Loans, Dryers and other post harvest facilities, and Seeds.)
The President has thus far released P13.25 billion in FIELDS funds for this year alone: P1.3 billion was for fertilizer assistance and subsidies; P3.15 billion for the repair and restoration of irrigation facilities; P1.5 billion in loans to farmers (May-July 2008); P694.74 million for extension services; P1.07 billion for flatbed dryers; P4 billion for farm-to-market roads; and, P1.54 billion for seeds.
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While a lot of us have looked askance at the food and peso subsidies that the government has begun as fostering mendicancy, this program has actually found praise from international experts and institutions.
The World Bank has expressed support for the Philippine government’s conditional cash transfer or subsidy program to help the poorest Filipinos cope with rising cost of living.
World Bank country director Bert Hofman said the bank is even willing to work with Philippine agencies like the Department of Social Welfare and Development (DSWD) to expand the scope of the program. Hofman said the subsidy scheme has proven effective in addressing poverty in Brazil, Mexico and other Latin American countries. “It is justifiable because it works very well for development,” Hofman said.
An official of the United Nations (UN) has also said that the Arroyo government has taken “correct action” to help address the immediate needs of poor Filipinos amid soaring food and fuel prices.
Stephen Anderson, the UN World Food Program (WFP)’s new country director and representative to the Philippines, said in a media interview: “The (Philippine) government is mobilizing (its) resources to address the immediate needs of the people, but it takes time to cover all the needs of the people.”
Kevin Cleaver, assistant president for program management of the UN International Fund for Agricultural Development (UN-IFAD), told the media during his recent Manila visit that the domestic rice problem “could be handled pretty easily by the Philippines” in the immediate and long-term, given the measures that have been taken so far by President Arroyo.
Robert Zeigler, the director general of the International Rice Research Institute (IRRI) has pointed out that the Philippines is doing well in overcoming the global food crisis. He noted that the Philippines, “relative to a number of countries, adopted technologies quite effectively and used them rather well,” in boosting rice production.
A United Nations Food and Agriculture Organization (FAO) report has bared that 36 countries—of which 9 are in Asia, 2 in Europe, 21 in Africa and 4 in Latin America—now require external assistance to cope with worsening food supply problems. The UN has listed these 36 countries that will need assistance for being “food insecure.”
Fortunately enough, the Philippines is not on this list, thanks in large part to the intervention measures that have been adopted to ensure sufficient food supply at a time of an unparalleled global food crisis.
But still, there is no time for complacency as far as Yap is concerned, given his worries over fresh challenges facing palay production this wet season. With prices of petrochemical-based fertilizers doubling to the P1,500-P1,900 range per bag in recent months—an offshoot of the nonstop increase in oil prices—farmers have cut back on their usage of this vital production input, hence hurting their probable yields come harvest time.
This fertilizer problem poses a serious threat to the DA’s production forecast of 10 million-plus tons this wet crop, which it needs to reach in order to hit its 2008 production target of 17.32 million MT (inclusive of the over 7.1 million MT output during the summer crop).
Now, Yap and the country will just have to wait and see what the main rice harvest will eventually bring in. Will it be a bumper crop or will the high prices of fertilizer result in a lower-than-hoped-for harvest?
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“We were both once presidential appointees and attended official functions in Malacanang Palace with our Presidents then and therefore we are very much aware of “protocol” and when you said in your column to which I can only fully agree: ‘Will someone please educate our Vice-President on proper dress? While PGMA was out of the country, President Pascal Couchepin of Swiss Federation and President Jose Ramos-Horta of Timor Leste arrived, they were both met by our tie-less Vice-President in a black t-shirt and gray coat.”
“But, what do you expect? How about PGMA? She also sometimes breaks protocol? Do you see her in her formal Filipina dress while meeting with Presidents of other countries, Foreign dignitaries? No you don’t.
“On some occasions we even see her in print and TV coverage while on her out of town inspection tour in her amazing and funny looking gangster out-fit with her base ball cap on complete with expensive sun glasses perfectly good enough for a ‘pizza delivery girl’ not only in the Western World but maybe even in the Philippines but then again– what do you expect- her imagination is so fertile.” –Mike M. Moreno, Chair, Fil-Am Fil-Can Alliance, Richmond, B.C. Canada
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hvp 08.12.08)
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