Senate probe of rice crisis sought

April 2, 2008

Opposition Sen. Rodolfo Biazon yesterday moved to have the chamber look into the impending rice crisis in the country and determine the reasons for the price increases.

He filed Resolution 339, directing the committee on agriculture and food headed by Sen. Edgardo Angara to conduct an inquiry in aid of legislation. It came on the heels of colleagues’ calls questioning the government’s spending of the billions of funds of the Agriculture and Fisheries Modernization Act (AFMA).

Sen. Francis Escudero wants an itemized spending of the billions of pesos Malacañang has ordered released to stave off a rice crisis as he scored President Arroyo’s decision to retain the tariff on rice.

Biazon said there is a need to determine the true state of rice supply in the country to properly address it as even the traditional sources of imported rice may not be available.

“For example, the question of high breed rice and in-breed rice, the question of cost production. High breed rice and in-breed rice, the question of cost production. High breed rice carries a higher cost of production than the in-breed rice. Although, high breed rice increases production from 10 percent in some areas even up to 63 percent of production in other areas. The difference in the yield of high breed rice is regional. I think there is a need for a research to be conducted by our government to determine why there is discrepancy,” he said.

In proposing an inquiry, Biazon also wanted the agriculture and food panel to dip its fingers on the implementation of the AFMA which provides among others, policies and programs to jumpstart development of the country’s agriculture sector.

Senate President Manuel Villar Jr., for his part, said the government’s scrimping on the agricultural modernization is partly responsible for the rise in the prices of rice and the failure of production to keep up with the demands.

Enacted in February 1998, the AFMA or Republic Act 8435 was supposed to allocate P20 billion in additional money for agriculture in the first year of its implementation (1999) and a minimum P17 billion annually thereafter.

The law further mandates separate funding for research and development and extension services which will be pegged based on the agriculture sector’s output.

“Funding shortfalls were worse in 2004 and 2005 when the deficits posted were P16.3 billion and P15.9 billion, respectively,” Villar said.

In 2006, or eight years after its enactment, AFMA appropriations were still below the P17-billion minimum mark, at P16.3 billion.

“It only exceeded the P20-billion mark last year and will reach P23.3 billion this year, in part due to congressional insistence that government pay its AFMA dues,” Villar said.

Escudero, in questioning Mrs. Arroyo’s decision to retain the tariff on rice, pointed out what he called as lack of logic in her order tapping budgetary savings for rice production when these can only be realized at the end of the fiscal year.

With funds for agriculture now “flowing like water in an irrigation canal,” Escudero said the government should make public “where, for how much, and for what purpose” will the money be spent.

Itemized spending, he added, will remove “the chaff from the grain, the propaganda from what’s real.”

He also decried the announcement Mrs. Arroyo made upon her arrival from Hong Kong Tuesday night that the import tariff on rice will be retained.

But Escudero believes that the policy to retain rice tariff was motivated by the desire to “spruce up the revenue report card of the government because it wants to continue booking National Food Authority (NFA) tariff payments as revenues.”

“This window-dressing will pad tax collection by about P30 billion, through the ridiculous practice of treating DBM (Department of Budget and Management) releases for rice duties as Customs collection, which is a self-deluding exercise because it merely transfers money from the government’s right pocket to the left,” Escudero said.

The economic team of Mrs. Arroyo, for its part, said it is considering to increase the subsidy of the NFA to allow the state agency to shoulder the import costs of private importers and strengthens its buying capacity.

Agriculture Secretary Arthur Yap said the scheme would call for the NFA to import rice “through a tax-expenditure-subsidy scheme and the volume that NFA brings can be sold to the private sector for it to distribute on the basis of an equalization fee that they will bid for.”

Under the plan, he said the private sector will be allowed initially to bring in 163,000 tons of rice this year, with each importer given a maximum volume of 2,500 tons.

She was supposedly set to discuss the country’s possible rice importation from Thailand on Friday when she meets with Thai Prime Minister Samak Sundaravej, who is due for a state visit in the Philippines.

But the Thai prime minister has postponed its official visits to the Philippines and Brunei after falling ill during a trip to Laos, a foreign ministry official said.

Sherwin C. Olaes and PNA

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