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Give rice tariff law a chance, govt urged

July 31, 2019

Despite appeals from industry stakeholders, particularly farmers groups, the government should wait at least a year of implementing the Rice Tariffication Act before it pursues a review of the law, an agriculture expert said.

Give rice tariff law a chance, govt urged 1

For Former Agriculture Secretary Dr. William Dar, who is also the current president of InangLupa Movement Inc., a review of Republic Act 11203 or the Rice Tariffication Law would be unwise for the government to do.

Reviewing the law at least a year after it has been fully implemented will allow the government to clearly determine the impacts of the law, both to farmers and consumers, he said.

“It’s not yet implemented. I want it to achieve full implementation. Give it a chance. One year will be a good indication,” Dar told The Manila Times.

While President Duterte can order for an increase of tariff on rice imports to protect the rice industry from sudden or extreme price fluctuations, as one of the provisions of RA 11203, Dar said the government should do so in a year of the rollout of the new rice regime.

“I’m bias on the full implementation of the law. Let’s give it a chance first. Then let’s see whether the tariff would still be low or not. That’s one of the measures the President can do as adjustments. It’s part of the law,” Dar said.

His statements came after Senator Cynthia Villar said it is too early to review RA 11203, which is so far in four months of implementation. “[The issue here is] the implementation of the law, not the law itself. The law is very good,” she said.

Even Finance Secretary Carlos Dominguez III, head of the Duterte administration’s economic team, dismissed calls for a review of the rice tariffication law, citing that prices of rice have declined with the liberalization of rice imports.

But leaders of the rice industry expressed disappointment on the initial impacts of the new rice regime to the rice sector, which include the steep drop on the farmgate prices of palay (unhusked rice), closure of a number of rice milling facilities in several major rice-producing provinces, and thus, the need to immediately impose a safeguard duty and increase the tariff on imported rice.

The Rice Liberalization Act, which was passed in February this year, removed restraints on the importation, export and trading of rice. Restraints on imports were replaced by tariffs. Under the law, the country will apply a 35 percent tariff for rice shipments from Asean member states, 40 percent for in-quota or within minimum access volume (MAV) from non-Asean, and 180 percent for out-quota and non-Asean or as calculated by the Tariff Commission.

Since the passage of RA 11203, there has been a 422-percent increase in the volume of rice imported by the Philippines, according to the Bureau of Customs. From March to July, about 1.5 million metric tons (MT) of imported rice have already entered the country.

The Philippine Chamber of Agriculture and Food, Inc. (PCAFI) and Philippine Confederation of Grains Associations blamed the unimpeded rice importation for the very low prices of locally-produced palay which have reached to as low as P12 per kilo, compared to P20 per kilo and above quotation recorded in 2018.

The Philippines is seen to become the second largest rice importer in the world this year, according to the US Department of Agriculture (USDA). Philippine rice imports are expected to reach an all-time high of 3 million MT, just 500,000 MT short of China’s rice importation requirement.

The new law also calls for the establishment of the Rice Competitiveness Enhancement Fund (RCEF) which will be endowed with P10 billion a year for six years which will be utilized to provide different forms of assistance to the country’s rice farmers such as the development of inbred rice seeds, the development of rice farm equipment and skills enhancement.

According to Dar, the Department of Agriculture (DA) should also look closely on how to specifically increase farmers income under the new rice regime, citing focus on hybrid rice farming and diversification as ways to do so.

“[The] hybrid rice technology is one opportunity to increase income. The diversification after rice like planting vegetables, that’s again one opportunity we need to tap. The crop diversification indicated in the rice tariffication law is already an indication that when properly done, you can also increase income opportunities. On top of that, [there should be] value-adding,” he explained.

RA 11203 also removed the National Food Authority’s (NFA) rice importation function and repealed its regulatory powers over the grains industry. Under the liberalized rice trading scheme, the NFA will no longer be allowed to import rice as its role was confined to buffer-stocks management for emergencies and calamities through buying palay solely from local farmers.

As of June, NFA’s nationwide palay procurement reached 626,100 bags, up 140 percent from the 261,000 bags target set by the agency. NFA Administrator Judy Carol Dansal attributed this on the agency’s continued intensified palay procurement, which gives P3.70 incentive per kilo to local farmers for a total of P20.70 per kilo buying price for clean and dry paddy rice.

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