FIFTEEN farmers and fisherfolk organizations released a joint statement Wednesday, Nov. 30, 2022, expressing their opposition to the extension of Executive Order (EO) 171, saying the reduced import tariff did not benefit consumers.
The group instead wants the Marcos administration to protect local agriculture, through various programs and interventions to ensure food security.
EO 171 was originally issued by then-President Rodrigo Duterte in May 2021 purportedly to address the rising prices of pork, rice, and corn by lowering their tariffs until the end of 2022. With the EO’s nearing expiration date, various groups including Marcos’ economic managers are backing the extension of the validity until 2023, citing the lingering effects of Covid and the war in Ukraine.
But despite this directive which resulted in huge import volumes, consumers, according to local producers, continue to reel from high food prices.
“The surge in imports has not benefited the buying public, whereas it has depressed farm gate prices. The National Treasury has lost billions in revenues due to reduced customs duties. Cheap imports have further discouraged our farmers from sustaining and expanding their production, thus causing even more supply shortages, and increasing our dependence on imports,” the joint statement said. “This vicious cycle will persist -- for as long as we do not rationalize and align our trade policy with our sustainable food self-sufficiency objective.”
President Ferdinand Marcos Jr., has yet to decide whether the government will extend the effectivity of EO 171.
Litmus test
Marcos assumed the leadership of the Department of Agriculture (DA) “to make it clear to everyone what a high priority we put on the agricultural sector.” The group said Marcos underscored the need to boost local production and reorganize the DA bureaucracy.
The group said Marcos also questioned a trade policy that prescribes that “a country should not produce but import what other countries make more of and sell cheapest.” “He (Marcos) implied that relying primarily on imports makes the Philippines vulnerable to supply disruptions from external factors like the Covid pandemic, the war in Ukraine, and climate change,” the group said.
“What President Marcos does with EO 171 will be a litmus test of his political will in prioritizing local food production over imports and his ability to rein in economic managers who are pursuing a different track,” the group said.
EO No. 171 extends the validity of EO 134 and 135, which lowered the most favored nation (MFN) tariff rates for the importation of pork and rice up to end December this year.
The EO also reduces MFN tariff rates for corn to five percent in-quota and 15 percent out-quota, citing that corn accounts for more than 50 percent of the total production cost of large-scale broiler and swine farms.
To help maintain or lower electricity prices, EO No. 171 also temporarily eliminates the seven percent MFN import tariff rate on coal as it is an important raw material in the generation of electricity.
RCEP
Moreover, the group also urged Marcos to stand firm on his commitment to protect and support our farmers and fishers in connection with the Philippines’ proposed membership in the Regional Comprehensive Economic Partnership (RCEP) trade agreement.
The group said, “entry into any trade or economic deal must be based on equality, reciprocity, mutual benefit, and national interest.”
“We ask the President (Marcos) to broaden and deepen consultations and participative processes with farmers and other primary stakeholders by the DA and other agencies dealing with the agro-fisheries sector. This will contribute to better formulation, implementation and monitoring of policies and programs,” the group said.
The RCEP is a free-trade agreement among the 10 members of the Association of Southeast Asian Nations (Asean) along with China, Japan, South Korea, Australia, and New Zealand and is billed as the world’s largest FTA. This covers roughly 50.4 percent of the Philippines’ export markets and 67.3 percent of the country’s import sources.
Joining RCEP will preserve 98.1 percent of tariff lines, which corresponds to 228 commodities or US$16.9 billion of imports. Only 15 agricultural commodities representing 33 tariff lines will see lower tariff rates. They account for only 1.9 percent of total tariff lines and only 132 million dollars or 0.8 percent of total agricultural imports. These commodities will be affected since RCEP rates for these items are generally lower than the most favored nation rate and lower than the Aseam+1 rate.
Meanwhile, the group also expressed its concern about DA’s unliquidated budget usage totaling P22 billion in 2020. It also called out the government over little or no involvement of farmers, fishers, and their organizations in the crafting of the 2023-28 Philippine Development Plan that is being finalized by the National Economic and Development Authority.
Signatories
The joint statement was signed by Nicanor Briones, Party-List Rep. for Agricultural Sector Alliance of the Philippines; Dioscoro Granada, president Federation of Free Farmers; Elias Jose Inciong, president United Broiler Raisers Association; Rolando Tambago, president Pork Producers Federation of the Philippines Inc.; Roger Navarro, president, Philippine Maize Federation; Arsenio Tanchuling, president Alyansa Agricultura; Rafael Mariano, chairman emeritus, Kilusang Magbubukid ng Pilipinas; Herminio Agsaluna, president, Pambansang Kilusan ng mga Samahang Magsasaka; Gregorio San Diego, chairman, Philippine Egg Board Association and United Broiler Raisers Association; Charles Avila, executive director and spokesperson, Confederation of Coconut Farmers Organizations of the Philippines; Eduardo Mora, chairperson, Pambansang Kaisahan ng mga Magbubukid sa Pilipinas; Roy Ribo, national coordinator, Katipunan ng mga Maliliit na Magniniyog ng Pilipinas; Asis Perez, convenor, Tugon Kabuhayan; Rene Ofreneo, president Integrated Rural Development Foundation; and Marlon Palomo, executive director, Philippine Rural Reconstruction Movement. (KOC)