'[The Rice Tariffication Law], did not work to lower the price but instead gave the traders windfall profits while the farmers suffered with a farm gate price of just P10 per kilo which when converted to rice should only be P20 per kilo with the low recovery of our kiskisan of just 45 percent.'
PBBM: What's this about farmers complaining against the Price Cap as per my Executive Order?
KA SONNY: Sir, you were "too late the hero". It should have been when you took over the Department of Agriculture.
PBBM: And why so?
KA SONNY: It is because of the RTL (Rice Tariffication Law) which should be amended by now to take it away from it being distributed equally among towns, provinces and political districts like a pork barrel even if they do not need it. The almost P20-B collection per year should have been used to putting up Common Service Facilities in areas producing rice to encourage farm consolidation.
PBBM: I still do not understand why the farmers should complain now?
KA SONNY: Mr. President, our farmers are now about to harvest and will negatively be affected by the price cap which goes against the price equilibrium.
You see, when the price is depressed it also depresses the price of palay, which is their only source of income. How then can they pay their debts and continue planting rice?. The farmers only continue to plant rice just so they have a crop to show to lenders for them to survive the "gawat" as Sen. Imee says. Otherwise, their family will go hungry. For which reason they are forever indebted.
PBBM: Well, this is why we are now subsidizing and giving them ayuda and helping them become entrepreneurs. To encourage their children our B.S. Agriculture is now sliding towards entrepreneurship, for which reason the PRC Board of Agriculture has now revised their Table of Specifications (TOS) to conform to the new curriculum approved by CHED. So, what else must I do?
KA SONNY: Sir, under the WTO you are not allowed to provide subsidies anymore. Your administration can intervene by providing public investments to farmers willing to cluster and consolidate with the RTL Fund.
While your bureaucrats, technocrats and government bankers claim that the farmers have no absorptive capacity, this is because of its fraudulent RTL IRR, which is reactive.
PBBM: How then can we work this out while we are working on the amendment of the RTL and its IRR?
KA SONNY: Our NEDA and its economists will answer you with highfalutin economic terms.
Let me just try: "Your Administration must now allow the price of palay and rice to seek their own levels."
For example, when the previous Administration approved the RTL, our importers were able to import rice with a landed cost below the unit cost of producing rice even with the 35 percent tariff. Yet they did not lower the retail price of rice which was then at P40 per kilo.
And so the RTL did not work to lower the price but instead gave the traders windfall profits while the farmers suffered with a farm gate price of just P10 per kilo which when converted to rice should only be P20 per kilo with the low recovery of our kiskisan of just 45 percent.
When the price of urea and other chemicals went up only the producers or farmer suffered the additional cost while the average price of rice stayed at P40 per kilo. This means that the consumers or the rice market could absorb the high price (which will now give a better farm gate price of P20 per kilo for our farmers to get them out if poverty).
It should have been during the Duterte Administration and his Secretaries for Finance, Agriculture and Trade that advised him to put a cap to the retail price of rice because of the very low landed cost then which was the rationale for approving the RTL.
That is now water under the bridge. Now as we pull the lifeline to make life affordable for all because even the rice farmers are now consumers it only tightens to choke our necks.
PBBM: And so what must I do now?
KA SONNY: Sir, there is not enough space here to suggest what must be done. But as I always used to say please "read my lips" for me to be of help to you only.
(NOTE: Ka Sonny is a subsistence rice farmer that graduated from UP Los Baños with a major in soils and was Marketing Manager of foreign agricultural companies and an advocate of integrated bio farming system to reduce unit cost in producing rice. For more of the Chimeric Conversation please go to OpinYon.net )
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