The Federation of Free Farmers warned that the signing of the rice tariffication bill will render the government powerless to control price spikes and market failure in the future.
The group said the original intent of the bill was to free rice importation from volume restrictions and replace them with tariffs in observance of the country’s commitment to the World Trade Organization.
“We accept the fact that we now have to tariffy the quantitative restrictions on rice. However, the legislators went beyond that by also removing the powers of the National Food Authority to regulate the market. This is dangerous not only to consumers and farmers but for the government as well,” said FFF national manager Raul Montemayor.
He said the bill would limit NFA’s powers to maintain buffer stock which is important during crises, calamities and emergencies.
NFA will have to buy buffer stocks solely from local farmers and will not be allowed to import.
Under the bill, rice will be brought in by the private sector, requiring no less than a quarantine certificate from the Bureau of Plant Industry.
“This means that cheap rice will not be available in the market unless there is a declared emergency or calamity. If prices started going up, the government will not be able to intervene unless it declares an emergency. Even then, it will run the risk of very little stocks left if a calamity or typhoon hits the country. And the NFA may not be able to easily replenish its buffer stocks if famers won’t sell to them,” Montemayor said.
“Similarly, the farmers cannot depend on the NFA to buy their produce if palay prices are going down. Once the NFA accumulates enough for its buffer stock, it will have to stop buying from farmers. Local traders will now be free to set whatever price they want,” he said.
The farmers’ group said the buying price of palay started going down to as low as P15 per kilogram in major rice producing areas of the country.
“Traders are forced to buy at a lower price because of large volumes of imports. Many of them are playing it safe and buying low because they are afraid that imports will increase once the tariffication bill is signed into law,” said FFF president Ruben Presilda.
NFA was given P7 billion for palay procurement which is good for about 400,000 metric tons or 2 percent of total palay production.