Philippine agriculture

Farmers reject rice tariff cut, say move will only benefit few importers

Iya Gozum

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Farmers reject rice tariff cut, say move will only  benefit few importers

A rice retailer at the Pasay City Public Market on September 5, 2023.


The agriculture department says that in light of reduced tariffs, they would have to fill the potential shortfall in the Rice Competitive Enhancement Fund

MANILA, Philippines – In a bid to lower rice prices, House Speaker Martin Romualdez said Thursday, June 6, government was using “all options for the complete arsenal,” but these initiatives did not sit well with Filipino farmers and traders.

First, government was proposing amendments to the Rice Tariffication Law (RTL) which will give the National Food Authority power to import rice.

Second, government plans to lowering tariffs of imported rice from 35% to 15% until 2028. This could bring down prices up to P5 per kilo.

Farmers though opposed this latest move from the government, saying in a statement that historically, “reduced price tariffs paved the way for more rice imports, and yet rice prices have only gone up.”

Agriculture groups said that in the past reduced tariffs penalized local producers, hurt consumers, and deprived government of revenues. They said that foreign rice suppliers will only increase their prices in light of the tariff cut.

“Reducing rice tariffs only benefitted a few privileged importers and traders,” said the statement.

The statement was signed by leaders of Samahang Industriya ng Agricultura, Philippine Confederation of Grains Associations, Federation of Free Farmers, United Broiler Raisers Association, National Federation of Hog Farmers Inc., Kilusang Magbubukid ng Pilipinas, Bantay Bigas, National Rice Seed Growers Federation of the Phils Inc., PANGISDA-Pilipinas, Pambansang Mannalon, Mag-Uuma, Magbabaul, Magsasaka ng Pilipinas, Fair Trade Alliance, and Arya Progresibo.

“As of end May this year, we have already imported 2 million metric tons of rice, equivalent to 53% of our projected imports,” the groups said.

“If the intention of tariff reduction is for buffer stocking, we only need 12% of the projected rice imports or around 450,000 metric tons of imported rice. So why the need to reduce rice tariffs?”

Independent think tank Ibon Foundation called the tariff cut a “desperate move” and would have, at best, “just a negligible effect.”

Sonny Africa, executive director of Ibon, said the cut “is just going to be offset by high global prices and the peso depreciation.”

“The structural reason for expensive rice is chronically poor government support to improve rice productivity, made worse by so much dependence on imported inputs which makes rice production vulnerable to any weakening of the peso,” Africa added.

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Lower tariffs, lower revenues

Government revenues from rice tariffication are supposed to seed the money for the Rice Competitive Enhancement Fund which has an annual appropriation of P10 billion.

Department of Agriculture Secretary Francisco Tiu Laurel said they will fill the potential shortfall in the rice fund.

“Our priority is to ensure that our rice farmers will continue to benefit from the rice fund created under the Rice Tariffication Law, and (we are) confident will be extended until 2030 to improve the lives of millions of impoverished farmers,” said Tiu Laurel.

The DA might have to pull out a bigger chunk from its own budget to do this, as the proposed amendments in the RTL included increasing the rice fund from P10 billion to P15 billion.

Whether rice farmers are receiving their share of the rice fund or not is a different issue altogether. Rice farmers Rappler talked to in Nueva Ecija last May said, while welcomed the RTL changes, they were concerned over the backlog of the distribution of financial assistance.

The Philippine government targetted to lower rice prices below P30 as early as July, around the same time President Ferdinand Marcos Jr. was set to deliver his third State of the Nation Address.

“Reducing rice tariffs is expected to bring down rice prices for consumers while supporting domestic production through tariff cover and increased budgetary support to improve agricultural productivity, especially as global rice prices remain elevated,” said National Economic and Development Authority Secretary Arsenio Balisacan in a Malacañang briefing on June 4.

The government is also maintaining lower tariff rates for corn, pork, and mechanically deboned meat until 2028.

Balisacan said the President will issue a new executive order to implement the tariff program. –

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Iya Gozum

Iya Gozum covers the environment, agriculture, and science beats for Rappler.