Saturday, May 24, 2008 Editorials: Spending on rice production
REPORTS have it that the Philippine government spent in the first four months of the year some P6.9 billion rice subsidies to alleviate the plight of the nation’s poor in the face of the rice shortage.
The amount reportedly represents “92 percent of the P7.5 billion in tax expenditure fund (TEF) allocated by the National Food Authority (NFA) for the full year.”
TEF is actually a tax subsidy extended by the national government to certain “selected state-owned firms.”
TEF is a form of financial assistance utilized by the beneficiary agencies to pay taxes and duties to the Bureau of Customs (BOC) or the Bureau of Internal Revenue.
Tariff
In the case of the NFA, the agency utilizes TEF to pay its taxes and import duties.
The NFA imported 1.71 million metric tons from January to April, 2008 alone.
Extension of TEF to selected public agencies makes the government appear as if it’s baking a cake an eating it, too, as the same amount is plowed back to the national coffers in the form of revenues to the recipient entities.
The BOC slaps “a 50-percent tariff” on imported rice.
The importers, in turn, add the pro-rated tax the price of the rice that is eventually sold to the consuming public, thus making the consumers assume the taxes.
Under-investment
The question that has been asked quite often in recent weeks is why the Philippines, considering its being one of the biggest rice consumers and importers in the world, has not been able to develop as much land area to be able to produce more rice.
An economist of the Manila-based University of Asia blames the government “under-investment in agriculture and infrastructure” as the villain in the current rice shortage, on top of “a poor record in eliminating poverty and poor infrastructure quality.”
The Philippines has not properly invested in agriculture or on its support infrastructure such as irrigation and farm to market roads.
The government, despite the presence here of the International Rice Research Institute, has invested little on rice research and development.
Unless the current administration initiates and implements new policies designed to improve our rice productivity, pity our millions of rice eaters.
