Agricultural Trade Liberalization Behind Rice Crisis

The country’s dependence on rice imports in the wake of the liberalization of its agricultural sector is behind the concerns in the supply of rice, according to independent think-tank IBON Foundation.

The Philippines is Asia’s top rice importer with an average annual importation of over one million metric tons a year from 1995 to 2006, from 151,588 metric tons from 1984 to 1994. IBON points out that 1995 was the year when the Philippines became a member of the World Trade Organization and intensified trade liberalization.

The country’s dependence on imports is what lies behind concerns behind the country’s rice supply. Government officials have claimed that there as no shortage in rice stocks even as they are struggling to source some two million metric tons of rice this year amid tight global supply and soaring world prices.

The liberalization of the agricultural trade has resulted in the bankruptcy of local farmers. Governments have also failed to dismantle the local cartel of rice traders, and this has contributed to the artificial shortage in the country.

Moreover, rice farmers continued to be saddled with problems such as high production costs, inadequate irrigation and other facilities and inaccessible credit. Because of these problems, rice production has not increased significantly over the past decade.

To increase productivity and ensure the country’s self-sufficiency in rice supply in the short-term, regulatory mechanisms on food supply that were removed by liberalization should be imposed again, together with providing enough subsidies and other support services for rice farmers. (end)

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IBON Foundation, Inc. is an independent development institution established in 1978 that provides research, education, publications, information work and advocacy support on socioeconomic issues.