Retards in the Government Special Edition: Rice!

In this time, the most precious substance in the Philippines is the rice. The rice extends life. The rice expands consciousness. The rice is vital to jeepney travel. The rice must flow. Why is there so much trouble with rice these days? He who controls the rice controls the Philippines. It is the government who controls the rice which should clue us in immediately as to why there are problems.  

The headlines this week shout loudly that the NFA buffer stock of rice is gone.

https://www.philstar.com/headlines/2018/04/04/1802590/nfa-rice-gone-govt-retailers-disagree

“We all know that the stocks of the NFA are running low but the overall rice supply is more than sufficient with plenty to spare. No need to panic,” Guevarra said in a text message.  

Adjusting the importation schedule of the NFA is also unnecessary, according to Guevarra.  

“There is no shortage so the same importation schedule will be followed,” he said.  

Or maybe not. What's this about no shortage and keeping to the same importation schedule? Duterte does not seem to agree.

http://newsinfo.inquirer.net/980478/duterte-orders-abolition-of-nfas-policy-making-body-duterte-rice-subsidy-nfa

With the impending shortage of subsidized rice in the country, President Rodrigo Duterte has ordered the abolition of the policy-making body of the National Food Authority (NFA) to fast-track the agency’s importation of rice. 

James Magbanua, national president of the Grains Retailers Confederation of the Philippines (GRECON) who was present at the meeting, said the President explained that the move was to do away with the rigors of bureaucracy.

According to Magbanua, President Duterte wanted the imported rice to arrive as early as next month, as opposed to the shipment’s original time frame to arrive in June. 

The NFA Council is an 18-member advisory body that is tasked to evaluate proposals coming from the agency’s management team, which is led by NFA administrator Jason Aquino. 

Do away with the rigours of bureaucracy? By abolishing the NFA Council? Maybe Duterte is just embarrassed because he did not listen to what the Council had to say last year and enforced a ban on rice importation during peak harvest time because farmers were expecting a "bumper crop."

http://news.abs-cbn.com/news/04/06/17/duterte-halts-rice-importation-due-to-high-local-yield-piol

"President Duterte said that while there is a need to import rice to fill up the requirements of the country for buffer stock, the importation must not be done during the peak harvest season as this would compete with the production of the Filipino rice farmers," Piñol said in a statement, citing the President's announcement Wednesday. 

At a harvest festival in Nueva Ecija on Wednesday, the President fired Undersecretary Maia Chiara Halmen Reina Valdez for defying National Food Authority Administrator Jason Aquino's decision to suspend rice importation given the local harvest season.

It is true that he fired one person, a holdover from the Aquino administration, but according to her the entire NFA Council voted to continue to import rice while NFA Administrator Jason Aquino did everything to stymie that plan.

http://newsinfo.inquirer.net/887631/sacked-cabinet-exec-denies-it-was-her-decision-to-extend-rice-importation

“Please note that except for the NFA administrator, who DELIBERATELY refused to attend NFAC meetings, the extension of the deadline of MAV from February 28 to March 31 was UNANIMOUSLY agreed and voted upon by ALL the members of the Council,” she said. 

“In sum, the decision therefor was made by the NFAC, as a collegiate body,” she added. 

Valdez said it was NFA Administrator Jason Aquino who publicly defied the NFAC decision. 

“That being said, the NFA administrator, after deliberately absenting him from the NFAC meetings where he should have raised and defended his position has opted to publicly defy the NFAC’s decision as though he is superior over all the other Council members,” she said. 

“Despite the result of the discussion made by the NFAC, the NFA administrator has bypassed the Council, and even went directly to the President requesting that there be G2G importation of rice with total volume of one million metric tons,” she said. 

Valdez accused Agriculture Secretary Emmanuel “Manny” Piñol and Aquino of meddling into the affairs of the Office of the Cabinet Secretary. 

“On their desperate attempt to convince the President to resort to G2G, the agriculture secretary who has been meddling on the functions and affairs of the OCS, and the NFA administrator have made it appear as if there is a shortage of rice in the country, causing alarm and possible upward movement in the prices of commercial rice,” she said. 

She said all decisions and resolutions of the NFAC and the OCS have been forwarded to the President through the Office of the Special Assistant to the President (OSAP). 

The NFAC members, she said, had been requesting for a dialogue with the President through OSAP but it was not granted. 

“To date, it appears to us that this request, along with the documents submitted by the OCS, which were personally handed down by Cabsec to the head of OSAP, have either failed to reach the President or have been tampered,” she said. 

“This leads us wondering, how come Jason Aquino and Emmanuel Pinol, were able to get direct access to the President, when the Cabsec has been trying to get through the President from the gatekeeper (OSAP), but to no avail?” she added. 

Duterte has said that he doesn’t want to import rice at the moment because it’s harvest season for farmers.

Duterte claims he is looking out for the farmers but is he really?

http://newsinfo.inquirer.net/974125/nfa-cites-low-buying-price-for-rice-woes

The National Food Authority (NFA) could not buy rice from local farmers for more than P17 per kilogram but could import rice from Vietnam or Thailand for P24 per kg. 

The reason? Rules that prohibit the NFA, an agency under the Department of Agriculture (DA), from spending more than P17 per kg on locally grown rice. 

The budget limit, according to Lucia Balayon, NFA provincial manager for Davao del Sur and Davao Occidental, is forcing the NFA out of competition with private traders, who buy rice from local farmers for at least P19 per kg. 

“It’s sad to note that we could not directly compete with traders,” said Balayon. 

The fixed budget for NFA was “way too low” compared with farm gate prices being offered by private traders which range from P19 to P25 per kg, said Balayon. 

Farmers, she said, would naturally sell their produce for a higher price. 

“There would be no reason for rice farmers to sell their palay to the NFA given the discrepancy,” Balayon said.

Money talks and sellers who get lowballed walk. The government admits it cannot compete and farmers have no reason to sell their rice so cheap. Raising the price isn't doable either. That would mean a budget increase and it would have to be approved through all the committees. Why is the government in this game anyway? The game of importing, buying, and selling rice that is. The NFA controls the importation of rice into the country. Some people want to see that changed.

http://business.inquirer.net/216870/dof-wants-private-sector-role-in-rice-importation

The Department of Finance (DOF) has thrown its support to plans of imposing a tariff on rice imports, saying this was more beneficial to the rice sector readying to become an open market. 

In 2014, the World Trade Organization (WTO) allowed the Philippines to extend its QR on rice until June 30, 2017 in a bid to buy more time for local farmers to prepare for free trade.

Before June 30, 2017 came around Duterte signed Executive Order 23 which extended the Quantitative Restrictions on rice imports.

http://www.manilatimes.net/rice-import-quota-extended-3-yrs/328761/

But Agriculture Secretary Emmanuel Piñol in December called for at least a two-year extension, saying Filipino farmers were not prepared for an influx of cheap rice imports.

Filipino farmers have had several years to prepare in whatever way possible for participation in the free market but are still not ready. What preparations have been made? How has the government helped? 

 

Add http://business.inquirer.net/45969/us-opposes-philippines’-appeal-to-limit-rice-imports-at-wto

The government has pushed for a three-year extension of the QR, noting that Filipino farmers need protection and encouragement as the country wants to be rice-sufficient by 2013. The Philippines also wants to be a rice exporter in the coming years.

Rice sufficiency by 2013 did not happen obviously. The above article is from 2012. How long exactly has the Philippines had restrictions on rice importation?

https://www.adb.org/sites/default/files/publication/156759/adbi-dp8.pdf

Quantitative restriction on rice imports to the Philippines have been granted by the WTO since 1995! What is QR? It means the Philippines can impose a quota on imports of rice each year and they are also allowed a lower tariff.

Originally set to expire in 2004 and now set to expire in 2020! And all because the government wants to protect farmers from the adverse effects of the free market. In a word the Philippines hopes to become 100% rice sufficient with no or little need to import rice. The same line has been said over and over. Take this from 2004.

http://www.asiarice.org/sections/whatsnew/philippines200.html

The government is targetting to achieve a 97 percent self-sufficiency in rice this year with projected palay production of 155 million metric tons (MT).

97% self-sufficiency in 2004!  Well that is an admirable goal but we know that this did not happen at all. Let's jump a decade to 2014.

http://www.gmanetwork.com/news/money/content/370204/phl-on-track-to-meet-100-rice-self-sufficiency-in-2016-agri-chief/story/

The Philippines is still on track to become 100 percent self-sufficient in rice by the end of the Aquino administration's term despite the pronouncements by a former senator and now presidential adviser that the goal will not be achieved, the Secretary of Agriculture said Monday. 

"We have to remind him that we are already at 96 percent level, why go back to 90?" Agriculture Secretary Proceso Alcala said in a briefing in Quezon City.

"Malayong-malayo naman po iyon. With all the intervention,  naisaayos from 82 to 96 [percent], maganda na po iyon. It means we are doing something right," he said.

Rice self-sufficiency means covering the yearly domestic consumption, plus a 90-day buffer stock.

Alcala issued the statement after former Senator and current Presidential Adviser on Food Security and Agricultural Modernization Francis Pangilinan last week said he was happy with 90 to 95 percent self-sufficiency in 2016 and will import more to cover the buffer stock.

Pangilinan said there will no time frame in hitting the much coveted 100 percent self-sufficiency, Reuters reported last Wednesday.

One thing people, especially Philippine government officials with lofty goals, do not like is a naysayer. In the Philippine government there is always a naysayer wanting to dump a bucket of cold wet reality on your head and this guy turns out to be right. 96% sufficiency in 2014? How will that hold?

http://business.inquirer.net/239433/ph-now-95-self-sufficient-rice-supply

It doesn't hold at all. It slips to 95% three years later in 2017! And despite this slip and the goal ever being just out of reach the government remains optimistic.

With a favorable trend in the country’s average rice production per hectare, Agriculture Secretary Emmanuel Pinol said the Department of Agriculture’s rice self-sufficiency target could be achieved in 2019, or a year earlier than its original time frame.

Why can't the country meet this target of 100% rice sufficiency?  Why does it keep slipping out of reach? One reason is population growth.

https://www.technochops.com/sec-pinol-warns-ph-rice-self-sufficiency-fleeting-population-growth-left-unchecked/7674/

“Even if the country achieves rice sufficiency by the Year 2020 as programmed, maintaining the level of food security will be fleeting and temporary unless the massive population growth is checked,” he said. 

Piñol also explained that the Philippines’ resources (both in the land and in the sea) are not infinite and there would be a time when these would never be enough to feed millions of Filipinos. 

“Farmers can only produce as much food as there are lands to till and fishermen could only catch as much fish as there are seas to sail,” he said. “Beyond that, not even the best agriculturist could ensure that there will be enough food for everybody.”

Another reason is plain old fashioned incompetence. Old fashioned? Incompetence never goes out of style really.

http://newsinfo.inquirer.net/889910/govt-rice-policy-exposes-ph-to-price-spikes-shortages-says-economist

Piñol on Sunday lashed out at economists and think tanks after the Inquirer reported on a commentary from New York-based Global Source Partners, which warned that the Duterte administration’s rice policy exposed the country to the risk of falling stocks and spiking prices. 

As Piñol himself announced last week, “President Rody Duterte has ordered the National Food Authority (NFA) to buy the paddy rice produce of Filipino farmers and import only if there is a shortfall.” 

Clarete described this policy as “local procurement first, we are not by the way against rice imports, and there is no need to import rice because we are sufficient in supply.” 

Piñol took issue with economists and think tanks for suggesting that the ban on imports be reconsidered and that the NFA be allowed to import quickly as its buffer stock was running low and the lean months were approaching. 

But Clarete said Piñol, like his predecessor, mistakenly equated sufficiency with no importation. “If local supply is equal to local consumption, that is 100-percent sufficiency all right but at a higher price,” Clarete told the Inquirer. “There is rice availability (supply may not drop) but access to that supply may not be inclusive because of the higher price.” 

“So if the price goes up in the coming months, because of the ‘no need to import rice because we are sufficient in supply’ policy, the supply is not enough for the poor consumers,” Clarete said.

This article is dated April 18, 2017.  One year later what do we have?  The EXACT opposite of what Agriculture Secretary Piñol thought would happen. Rice supplies are low and rice prices are high.

The bottom line is this: the NFA and the Agricultural Secretaries of the current and past administrations do not know what they are doing. They keep shooting for lofty goals and consistently missing the target. Farmers have had since 1995, 23 years now, to prepare for the free market and they are still unprepared. The government says they want to help farmers but offers them low prices and apparently little or no help to prepare for the lifting of the quantitative restrictions. One economist says the problem is the government keeps doing the same thing and expecting different results while the government tells him to shut his mouth.

I don't know what I expected to find when I started researching this article or where I expected it to end up but here we are back in the same place we always end up, right in the thick of government incompetence. There are no answers. There are no answers to the rice problems, or alleged rice problems, in the Philippines. And by answers I mean there is nothing specific to point to and say, "A-ha! That's it right there." No. It's a number of things that are wrong here.

If you have learned anything I hope it is that the Philippines has been getting "freebies" from the WTO via quantitative restriction and low tariffs on rice imports since 1995 and they still cannot get their act together. Along with the Philippines, South Korea and Japan also were given a special quantitative restriction deal from the WTO but both of those countries have lifted their restrictions leaving the Philippines the only country with this special benefit now in place until 2020!

And now Duterte has plans to take over the NFA Council, the body which makes all decisions pertaining to the importation and purchasing of rice. Why? So he can make those decisions alone like some kind of rice king or rice dictator? Is Duterte going set the rice policy for the Philippines all by himself? Will the NFA Council be his rubber stamp?

https://news.mb.com.ph/2018/04/06/duterte-plans-to-take-over-supervision-of-nfa-and-its-policy-making-body/

That would be yes.

Rice sufficiency? Any day now!