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Disruptive private sector investments in rice production

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There is a great deal of rahrahrah these days for the magic of rice tariffication as the latest bright idea to bring down the price of rice and end the constant threat of rice-shortages from the decades of rice importation control through quota restrictions by the National Food Authority. Rice tariffication is also proposed as a magic wand to help improve the incomes of our beleaguered and aging (average age is 57) rice farmers.

There is a great deal of rahrahrah these days for the magic of rice tariffication as the latest bright idea to bring down the price of rice and end the constant threat of rice-shortages from the decades of rice importation control through quota restrictions by the National Food Authority. Rice tariffication is also proposed as a magic wand to help improve the incomes of our beleaguered and aging (average age is 57) rice farmers.

I am wary about this idea as it could be just another simplistic proposal to the highly complex rice productivity problem of our country. Well-meaning legislators are proposing the use of the government’s projected rice tariff incomes (ranging from 40% to 100%) as support to farmers in terms of irrigation, free or subsidized certified seedlings, fertilizers, equipment, milling and warehousing facilities, etc. As we should know by now, whenever government goes into subsidies like this, the lengthy logistical chain gets hindered, complicated, or corrupted along the way, thus depleting the resources that actually reach if at all, the intended beneficiaries. Keep in mind the billions of pesos lost out of the PDAF. Besides, have we considered how the foreign rice suppliers will respond to radical increases in tariffs? They have other markets where tariffs might be lower! We could end up with tragic rice shortages!

The modest pay scales of our bureaucrats and their lifestyle aspirations are too far apart; and, in many cases, politicians and bureaucrats separately or together tend to supplement their incomes by using their access to resources for their own benefit. Some of the money actually gets invested in laudable things like better education and high tech equipment for their children; but it does not, alas, reach the intended beneficiaries.

See full article at Business World Online

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