The Philippines has been relying on high tariffs since the 1990s to protect the local agriculture industry but this did not help local farmers become more competitive and technologically advanced.
Failing in this area, the government must focus on developing the sector to improve productivity of local farmers and make the economy self-sufficient, said AJ Montesa, program officer of Action for Economic Reforms.
“If we really want to address the core issue, we should stop relying on high tariffs and instead invest in the agriculture sector, so that when the time comes, we won’t have a huge dependence on imports,” Montesa said in One News channel’s program “BusinessWorld Live.”
Some of the support the government can give to improve the farmers’ conditions include offering them the skills, technology, and infrastructure to become more productive, allowing them the opportunity to find crops that would improve their standards of living, and expanding their links in the value chain, he said.
“The fact that we’ve been reliant on high tariffs to buoy our agriculture sector is sort of a symptom of a larger problem that we haven’t been able to invest properly, develop our agri sector enough in a sustainable way that we can have resilient agriculture production,” said Montesa.
President Marcos Jr., who heads the Department of agriculture, recently approved the recommendations to extend the tariff rate cuts on rice and other food items up to the end of next year, aiming to combat soaring food price inflation in the country.
Consumer price inflation in the country reached 8 percent in November, the highest in 14 years, based on figures from the Philippine Statistics Authority.
Montesa noted that the soaring inflation has been driven by pressures from global supply shocks such as the economic impacts of the Russia-Ukraine conflict and increasing fuel prices, the latter which has a spillover effect on the agriculture sector.
But reducing tariff rates can only serve as a stop-gap measure against inflation that can only work in the short term, he said.
“I think tariffs are just a way for us to meet the inflation that’s rising right now. But if we’re talking long-term solutions, the admin has to be more direct in its approach in addressing agriculture woes,” he said.