GOV’T CAN ENSURE CHEAPER RICE BY DOING AWAY WITH LIBERALIZATION, RESISTING CREDITOR PRESSURE

Government can actually provide the much-needed relief of low-priced rice if it only gets out of its liberalization framework in coming out with remedies to the current rice crisis, said independent think-tank IBON Foundation.

Its responses to the rice crisis such as lifting the rice import quota and the proposal to increase the selling price of National Food Authority (NFA) rice are all conditionalities imposed on government by multilateral creditors like the World Bank and the Asian Development Bank (ADB) for further liberalization.

The Arroyo administration could, for instance, increase NFA procurement to help local rice producers, but it clearly prefers to preserve its “fiscal gains” by denying the agency enough subsidy, said IBON research head Sonny Africa.

Rice imports needed to make up for shortfalls in local production could mean as much as a P64.1-billion subsidy for NFA rice this year, an amount that is already over five times the national government deficit in 2007. Providing this much subsidy– even if it will benefit farmers and consumers– would not sit well with creditors. Hence, instead of strengthening the NFA, government has removed rice import quota to allow private traders to import larger amounts of rice, and now proposes for a hike in NFA prices.

These recent government proposals, Africa said, all comply with the ADB and World Bank conditionalities of NFA privatization and full liberalization of rice importation. It clearly shows that while it can ensure cheaper rice, government chooses to abandon its responsibility to the people and give in to creditor pressure

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