MANILA, Philippines (UPDATED) – The government will help farmers compete with their counterparts in the region in the likely event of cheaper rice entering the country, the chairperson of the Senate agriculture committee said.
Senator Cynthia Villar gave the assurance to farmers as she pushed for a 35%- tariff on rice imports and the lifting of quantitative restrictions (QR) or a limit of imports. (READ: Philippines hopes to pass rice tariffication law in 2018)
QRs help protect local rice producers from cheap rice imports.
However, Villar favors tariffs, or charges a government imposes on imports, to level the competition in the market.
Villar’s proposal aims to make the market more competitive, which would lead to lower rice prices. The senator noted, however, that farmers may not be able to keep up with competition if they do not get support from the government.
"[Even with] 35% tariffication, you cannot compete with Vietnam. The solution is you have to bring down cost of production of rice and be competitive," Villar said.
The senator said that Vietnam is able to produce rice at a cost of P6 per kilo of palay, while the Philippines produces rice at P12 per kilo.
For local farmers to be competitive, Villar said that she is working with the Department of Agriculture (DA) to push for the mechanization or use of machines in rice production and the distribution of seeds with better yield.
"Vietnam's seeds are better than what we have. Right now, ours can produce 4.5 metric tons per hectare. Seeds from Philrice can produce 6 metric tons per hectare... so let us support that," Villar said.
She admitted that mechanization in the sector is "very low" at the moment.
Meanwhile, Agriculture Secretary Emmanuel Piñol said farmers can now easily borrow money from the agency through the DA's easy access financing program.
"Gusto natin may sense of ownership ang ating mga magsasaka kasi kung bibigyan lang natin ng binhi o kalabaw, ibebenta lang nila ‘yan. Pero kung inutang nila, hindi ganoon,” Piñol said.
(We want farmers to have a sense of ownership because if we just give them seeds or a carabao, they will just sell it. But if they borrowed money for it, that won't be the case.)
Villar and Piñol are confident that training and supporting farmers will help them survive stiffer competition in the market.
The National Economic and Development Authority (NEDA) is also for imposing tariffs over rice QRs. The agency said that the measure would lower the cost of rice in the market to P30.30 per kilo, P4.30 lower than the domestic wholesale price of regular milled rice. (READ: With rising inflation, NEDA calls for measures to help the poor)
NEDA estimated that with lower rice prices, a typical Filipino household would save P2,362 per year. Headline inflation rate would also be reduced by one percentage point, if the domestic whole sale rice market reduces its prices to the level of imported rice.