Solutions to the Philippine Rice Problem
This is a continuation of the article “The Current Philippine Rice Situation“.
The solution to the Philippine rice problem is a combination of several ideas, the top three of which are discussed below. If the Philippines will be able to successfully implement the three proposals, nothing less than a sustained supply can be expected. Let us start with the immediate solutions.
Free for all rice importation and removal of tariffs, VAT, etc.. At this point, the government charges rice imports a customs duty (tariff) of 40~50% and a value added tax of 12%. Because of such barriers being imposed by the government, the cost of imported rice is very high. A removal of tariff, tax and other restriction restrictions (quota) on rice importation will encourage more businessmen to import the commodity. With more imported rice coming in, hoarders will be forced to sell their stocks thus creating a free flow of the commodity in the local market. Such move will also spare the government from having to import a lot on its own. It will therefore save the taxpayers approximately P22.Billion ($549 M) for every one million metric tons that it is does not import.
Countertrade. If ever the Philippine government needs to import rice, it should avoid the speculator infested futures market. Instead, it should go for government to government transactions and go further by using countertrade. For instance, mangoes, bananas and finished articles of clothing may be sent as payment in exchange for rice. Countertrade has successfully been used by the Philippines to procure armored personnel carriers and many other items in the past. It will spare the government from high international commodity prices while promoting local products.
Control Population Growth. An increase in the country’s rice production will be meaningless in the long run if the population problem is not addressed. The number of Filipinos grew by more than 10 million within the past 10 years. UP professor Pernia points out that had our population grown parallel to Thailand’s, the demand for rice would not have reached this level. And with the current level of production, the Philippines would have been in surplus. If the country’s birth rate will not decrease, the Philippines would have to continue producing more and more each year.
Promote the Use of Rice Alternatives. Arresting population growth, increasing rice production, lowering its production costs and many other measures will all be gone to naught if people will still be dependent on rice. Typhoons, pests and a lot of things that can go wrong will go wrong. Especially now that global warming is believed to have actually arrived and creating havoc in rice exporting countries, it is but a matter of time before it hits the Philippines.
People don’t really need rice. The only reason there’s this hullabaloo right now is that the people of the Philippines are psychologically conditioned not be complete without it. As mentioned repeatedly in this website, the cultural and psychological values that rice has far outweigh its nutritional value. Kamote, for instance is cheaper, easier to cultivate, resistant to typhoons, can be eaten as a standalone dish, has lots of vitamins and antioxidants that rice doesn’t have, etc.
Related Article: Government may lose up to P22B in rice subsidies
Jun 3rd, 2008 at 12:33 pm
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