EDITORIAL - Importation to fight inflation

More supply of any product generally means lower prices. So it’s understandable that the administration, whose officials insist that the tax reform package implemented this year is not to blame for galloping inflation, is now reportedly considering importations of certain basic commodities to temper consumer price increases.

The downside in flooding the market with any product has always been its impact on local producers. This is the biggest concern of farmers in the ongoing move toward rice tariffication, which will open the floodgates to rice imports. In addition to rice, the government is reportedly also considering more imports of meat, fish and wheat products.

Consumers always welcome lower prices and more product choices in the market. The agriculture sector, however, includes millions of the country’s poorest, whose livelihoods could be affected by a flood of imports. In several other countries, the agriculture sector remains protected even in a globalized economic environment.

During extraordinary times such as when natural calamities strike, affecting crop and livestock production, the country has no choice but to augment local supplies with imports. But creating a supply glut to bring down prices must be balanced with the risks of the long-term deleterious effects on the country’s food production and security. Once people leave farming and livestock breeding because of low earnings, they may never go back to their former means of livelihood.

Those against a food importation spree are also raising concern about the potential for corruption when import restrictions are relaxed. There is also concern that imports of various products are being pushed as an election year approaches.

With inflation at a five-year high, the government must find ways of taming price surges. Importation is one way of tempering price hikes. But its benefits must be carefully weighed against the long-term impact as well as potentials for abuse.