AFTA to kill PH agri industry in 2015, says neophyte senator
DAET, Camarines Norte—Neophyte Senator JV Ejercito raised concern that the country’s agriculture sector would be devastated when the Asean Free Trade Agreement (AFTA), which lifts all tariffs on agricultural products among the 10 member-countries of the Association of Southeast Asian Nations, is enforced in 2015, or less than a year from now.
Ejercito, chair of the Senate committee on economic affairs, said he would move for the suspension of the AFTA enforcement because Filipino farmers cannot compete with the prices of agricultural products like rice and sugar from Asean countries like Thailand and Vietnam that are expected to flood the local market when the tariff barriers are lifted.
“It will kill the agriculture industry,” Ejercito said on April 15 at the sidelines of the province’s 94th founding anniversary celebration where he was the guest speaker.
Similar to EU
Asean was founded in 1967 by Indonesia, Malaysia, Philippines, Thailand and Singapore, later joined by Brunei in the 1980s (the so-called Asean-6) , and by Cambodia, Laos, Myanmar and Vietnam in the 1990s. The regional body envisions an economic integration process similar to that of the European Union that would expand the market and business opportunities for member countries. The plan involves the liberalization of trade in goods through the reduction and elimination of tariffs under the Asean Free Trade Agreement of 1992 (AFTA). The plan is to achieve zero tariff for all products by 2010 for the Asean-6 countries, and 2015 for the remaining four, according to Asean information documents.
Ejercito said sugar-producing provinces are expected to be affected with the expected entry of Thai sugar, which is cheaper than Philippine sugar, claiming Thailand subsidizes agricultural production in its country.
Subsidy to agri
Contrary to existing Philippine free trade commitments, Ejercito now proposes to subsidize agriculture.
He said they have initially discussed in his committee where to get funds to subsidize agriculture and he proposed to partake of the budget for the conditional cash transfer (CCT), a government program that grants monthly cash allowances to poor families to boost education and health care for children.
Ejercito noted the Aquino administration started with a CCT budget of P20 billion, increased it to P39 billion, and at present pegged it at P60 billion.
“The P60 billion budget is huge. That is, looking at it from all angles, it is dole out. Twenty-five percent of the CCT budget could do much to subsidize fertilizers, upgrade post-harvest facilities, modernize and mechanize farm system,” he said
Ejercito said it was only last year that the preparation for the AFTA enforcement was brought out during the budget hearing.
Not satisfied
He said he had asked Agriculture Secretary Proceso Alcala, during the budget committee hearing and on several other occasions, about the government’s preparation for the enforcement of AFTA but was not satisfied with his answers.
“(I am not) satisfied (with their) preparation. (Because when they talked about it), it seemed like 2015 is three years away… It’s just seven months from now,” said Ejercito.
He said the government has to act with urgency and it must have a deadline. Ejercito said he filed the Sugarcane Bill which aims to modernize aging sugar mills, most of which are 50 years old, resulting in high production costs.
“I will push to ask the World Trade Organization to extend to delay the enforcement of AFTA especially for sugar and rice. We need this because our industry is not prepared for the entry of cheap products from Thailand, Vietnam and Cambodia,” he said.
