GRP manipulates rice and food crisis to push all-out liberalization
Filipinos are currently tightening their belts amid galloping inflation and dominant control of big capitalists over rice, fish and other staple food supply despite the Philippines being an agricultural country. Based on data by the reactionary government, the average retail price of rice increased by 10% since 2017. Last month, Zamboanga City was compelled to declare a state of calamity after rice prices rose up to P70-P80/kilo in the city.
Simultaneously, prices of round scad (galunggong), tilapia and milkfish (bangus) soared up to P160-P200/kilo (higher by P20-P60 than its suggested retail price or SRP), P130/kilo (higher by P30) and P180/kilo (higher by P30), respectively. The regime considers the current food crisis as among the crucial factors why inflation hit a nine-year high of 6.4% last month.
But instead of strengthening local production consistent with the principle of food and agricultural security and sovereignty to address the said crisis, the regime’s economic managers and House Speaker Gloria Macapagal-Arroyo are using it as a pretext to implement unlimited importation of agricultural products in compliance with the policy recommendations of the World Trade Organization (WTO).
In particular, they are paving the way for the implementation of policies that will further dismantle importation restrictions and pull down tariffs.The enactment of the Rice Tariffication Bill that will completely remove the quantitative restriction (QR) on rice and replace it with a meager 35% tariff that is bound to be pulled down to lower levels in the coming years. Furthermore, the Department of Agriculture implemented last month the Fisheries Administrative Order 195 which permits the importation of 17,000 metric tons (MT) of round scad.
Under the Ramos regime in 1995, then Senator Arroyo lobbied for the Philippines to sign the Agreement on Agriculture (AOA) of the WTO. In accordance with the AOA, the country is obligated to liberalize and lower tariffs on imported agricultural products to allow the influx of the products in the local market. The Senate ratified the AOA through the enactment of the Agricultural Tariffication Law.
The proposal to completely liberalize the rice sector was met with dissent and resistance, and thus failed to materialize immediately. Amid broad protests, the reactionary government was compelled to apply for a ten-year extension before dismantling the QR on rice.
Although the tariff on rice has initially remained unchanged at 50%, the WTO required the country to implement a minimum access volume (MAV) for rice or the minimum volume of rice allowed to be imported in the country. The MAV was pegged at 3% of the total local production, but data indicate that rice imports are usually above this requirement.
When the reactionary government applied for further extensions on 2004 and 2012, the WTO was able to impose more inequitable trade policy restructuring requirements. On the second extension, it reduced the tariff on rice to 40%, and on imported meat from 40% to 35%. On the third extension, the MAV was increased to 7% and its tariff was reduced to 35%. Tariffs on meat, pig and chicken entrails and dairy products were simultaneously reduced. At present, the Philippines is the only WTO-affiliated economy with remaining QRs on importation. The regime is currently using the inflation on food prices as a pretext to justify full liberalization of rice and round scad in the local market.
Ibon Foundation belied the logic that high supply through unlimited importation of food products can stabilize and lower its prices.It explained that there were years when prices have continued to rise amid high importation. For example, the country has been importing an annual average of 1.8 million MT of rice for three years prior to the unprecedented Php7.99/kilo rice price spike in 2008. From 2008-2010, the country imported an annual average of 2.2 million MT, but the price of rice continued to increase on an annual average of Php1.20 until 2016.
Government has no control over the price of imported rice when sold at the local market, Ibon added. There were many instances in the past when local prices, especially retail prices in the market, did not always follow the movement of the global prices. There were periods when the price of rice in the world market was generally falling, but local prices continued to rise. This is due to the tight control of big traders over the supply and price of rice and the continuing neglect of the government of its duty to ensure that consumer rights are protected.
Clearly, the US-Duterte regime’s importation programs are mere schemes to push for all-out liberalization of minimally-protected agricultural subsectors, in compliance with the policy recommendations of the WTO. This only proves that the reactionary government has no plans to strengthen and increase local agricultural production, and instead continues to uphold neoliberal trade agreements used by imperialists to impose hegemony over the country.