CLIMATE CHANGE AND RICE SELF-SUFFICIENCY POLICY: Exploring Adaptation Strategy through Agricultural Policy Reform in the Philippines

The negative impact of climate change on agricultural production, especially the staple crops could potentially threaten food security in developing countries. While targeting rice self-sufficiency is commonly perceived as equal to attaining national food security in most Asian countries, the policy that promotes this program is susceptible to market distortions, especially when it involves policy instruments like trade restriction and price subsidy. This paper tries to explore the potential of reforming rice self-sufficiency policy in the case of Philippine, as a way to adapt to climate change by improving market resiliency that benefits both producers and consumers to mitigate the climate effect. We found that the rice program has not only diverting the resources to low-value added crops that reduces potential income of farmers under climate change effect, but it also hinders the structural transformation process by absorbing financial resources that could have been invested in more productive sectors. We proposed two alternative second best policies by providing cash transfers to the vulnerable households and combining it with rice price subsidy given the political importance of rice farmers in the country. Both alternative policies could improve not only economic growth and food security indicators, but also slightly reduce national income inequality, which overall improves the country capacity in mitigating the climate change challenges.