Rice affordability to hinge on stronger ASEAN trade
THE PHILIPPINES needs to strengthen its trade relationships with the rest of the Association of Southeast Asian Nations (ASEAN) to ensure access to affordable rice, an agricultural economist said.
“We have to strengthen our ASEAN trade relations to ensure rice availability and affordability…,” Karlo Fermin S. Adriano of the Ateneo de Manila University Economics department said. “Now, why do we need to ensure rice availability and affordability? Because we are basically a rice country.”
“When rice prices increase, there’s a panic (which is outsized in comparison to other expensive commodities) Even if prices of onion are soaring, there’s not much panic compared to rice,” he added.
In a briefing before the Makati Business Club on Tuesday, Mr. Adriano, an advisor to the Department of Agriculture (DA), said the DA’s “rice-centric budget” has led to the underperformance of the agriculture sector overall.
He said that an average of 50% of the DA budget was given over to rice in the 2017-2022 period, leading to the “neglect of the non-rice agriculture commodities.”
He said that the outsized budget cannot be tied to poverty relief as “rice farmers are relatively well off compared to other agricultural commodities and yet rice gets the lion’s share,” he said.
He added that the DA also suffers from “low absorptive capacity,” being unable to use all the funds allocated to it.
“Why are you going to give more money to the DA, when you know historically it has a (low) disbursement rate? You have to fix the low absorptive capacity before you actually give it more money,” he added.
Due to the insufficient supply of key agricultural commodities, he recommended a temporary reduction of import tariffs and an increase in the minimum access volume of key commodities, which is the volume of imports a World Trade Organization agrees to allow within its borders.
“We really need to import in the short term if we want to control food inflation,” he added.
He also recommended gradually opening agricultural commodities to foreign competition to promote innovation. — Sheldeen Joy Talavera