Feckless on tariffs, high on Ballys and Rolexes
THE Federation of Free
Farmers
(FFF) is host to a serious policy shop on agricultural issues. Unlike some of the university-based intellectual pretenders whose side gig is to shill for the mendacious William Dar, the secretary of Agriculture. Also unlike the supposed farmer-representatives in Congress, whose sense is generally this — a pompous, 10-sentence press release is the equivalent of an Einsteinian output on the most critical agriculture policy discussions.
The peasant group I am affiliated with is more focused on the mortarand-brick issues of agriculture such as what to plant and what to raise to earn enough for survival, and I am the first to admit that we fall short on the research and study front. Right now, we rely — like most small peasant groups — on the FFF to raise the right questions and the serious questions about the failings, big and small, of government on agriculture.
And the most recent issue the FFF has raised is about rice tariffs. Why is the Department of Agriculture asking the Tariff Commission for a temporary reduction in the out-of-quota tariff (rice imported from sources other than the Asean, a region with a trade pact) on imported rice from 50 percent to 35 percent. In an importation context, that allows importers to dump any volume of imported rice into our hapless ports and even at jumbo volumes that are usually more than enough to kill us, the small rice farmers, with impunity. In the rice importation ecosystem, imports from out-of-quota sources usually mean imports from two countries — India and Pakistan.
A brief on the recklessness of our rice imports. In 2019, the first year of the Rice Tarification Law (RTL), 3.1 million metric tons of rice were imported in a frenzy of rice importation like no other. In 2020, more than 2.2 million metric tons of rice was dumped into local ports. In 2019, we were the world’s biggest rice importer, eclipsing the record of China, a country with more than 1 billion people. This year, we shared that record with China, the two countries that topped the world in rice imports.
The FFF also raised another issue related to tariffs. What was the basis used by the Tariff Commission in setting the bound tariff on imported rice from out-of-quota sources from the 180 percent that is provided for in the RTL to the current rate of 50 percent? Without the benefit of a public hearing and in a move that smacked of the usual arbitrariness and highhandedness?
The FFF has requested for the outright rejection of the temporary lowering of the tariff from out-of-quota sources from the current 50 percent to 35 percent, then asked for an inquiry on the circumstances that led to the arbitrary decision to lower the bound tariff on out-of-quota rice from the 180 percent provided for in the RTL to the current 50 percent.
The appeal for the outright rejection of the proposed tariff cuts on rice imported from India and Pakistan from 50 percent to 35 percent is based by on these grounds, according to the FFF: rice from India and Pakistan are already cheaper than imports from the Asean member-countries, principally Vietnam. There is neither a supply shortage nor market disturbances that merit a temporary cut in out-of-quota tariffs. The factors that drive the low volume of rice imports from India and Pakistan are related to quality and reliability of supplies, and are not price and tariff-related. “Reducing tariffs may unnecessarily induce a depression in palay prices already reeling from price drops and calamities,” the FFF said.
The FFF’s position paper dealt with current and pressing tariff issues and had to be presented with clarity and brevity. But within the ranks of the aging peasantry, the exposé of another unhinged chapter of tariff fecklessness was like a ghost from the past, stirring an eerie sense of déjà vu. The cavalier attitude about agricultural tariffs has a deep and troubling history. The Philippines has a bad record in negotiating agricultural tariffs and the most brazen display of that fecklessness took place during the crucial round of setting bounden tariff for agricultural goods in preparation for the accession to the World Trade Organization (WTO) on Jan. 1, 1995.
The headline of this column, “Feckless on tariffs, but high on Rolexes and Ballys,” summed up the bizarre predisposition of the trade negotiators that were supposed to protect our domestic agricultural products by demanding for high bounden tariffs on imported agricultural goods, high bounded tariffs on agri products that were demanded — and obtained — by trade negotiators from the likes of Indonesia and Thailand. But instead of doing what their counterparts from Indonesia and Thailand did, our trade negotiators reportedly spent much time shopping for Ballys and Rolexes in the luxury malls of Geneva.
The disastrous result of the almost-treasonous fecklessness on tariff-setting on the side of the Philippine trade negotiators was noted by the WTO journals. That the Philippines and Chile were the two countries that settled for lowest bounden tariffs on agricultural goods is part of official WTO history. The agricultural-exporting powers were able to dump agri imports at the very start of the WTO regime in 1995 because of our low bounden tariffs.
The very lofty promises of the WTO accession — more agricultural jobs, increased exports , the rise in our agriculture’s gross value-added — turned out to be empty words. In terms of agricultural productivity and exporting power, we are now the Sick Man not only of Asia but much of the world.
Were sanctions imposed on the trade negotiators that betrayed the Filipino farmers and agriculture? In a country of twisted values, they probably got medals and promotion. And gifted with more Ballys and Rolexes.