The con artist strikes again

‘The sting is that private importation will be allowed only until the rice problem eases.’

Let’s do another walk through the rice market situation. Let’s place the price of the foreign rice at $700 a ton (it’s close to $800 now, but we’re using the price at which the NFA contracted its last order from Vietnam). That gives a local landed price of P30 a kilo. Add the 50 percent tariff and the cost goes up to P45 a kilo before the shipment leaves the ports).

At P45 a kilo, an importer cannot possibly compete with local rice at P30 a kilo. He can pitch his imported rice at the high-end consumers who it so happens are already able to pick up their supply of Thai jasmine or California long grain from the shelves of SM and Rustan’s.

So the injury to local farmers that the nationalists and populists fear exists only in their imagination. Even if the 50 percent tariff is scrapped, local price is still cheaper than the imported stuff. The proper question to ask, therefore, is why Gloria is adamant in keeping the very high tariff.

Gloria says she needs the collections from the tariff to bankroll agriculture modernization. Based on the planned importation of 2 million tons this year, government stands to earn a whopping P26 billion. The money will be used, according to Gloria, to ease the cost of inputs – fertilizer, high-yielding seeds, etc. – of farmers.

Sound sensible, doesn’t it? But why not scrap the tariff altogether and forego the collections so everybody – farmers, workers, the jobless - can benefit from lower prices? Sure even the Ayalas would benefit, but how many kilos of rice could they conceivably consume in one day?

The key to the puzzle is that P26 billion. If the intention is to help the farmers, PAF helicopters could simply rain P1,000 bills on the countryside to get the money into their hands. Nothing would stick in the hands of the sticky fingered. The Joc Joc Bolantes and their lone padrino would have nothing to pocket; likewise the members of the Union of Local Authorities of the Philippines who expect to be compensated in proportion to how long and how hard they clap their hands every time Gloria fetes them in Malacañang or pays them a visit.

The sting in Gloria’s announcement is that private importation will be allowed only until the rice problem eases.

Let’s take a look at our crystal ball. Thailand and Vietnam post bumper harvests. The price of foreign rice drops to $400 a ton or P16 a kilo. Private importation is halted. The padrino gives the go-ahead signal for the smugglers to bring in foreign rice by the shiploads.