The National Economic and Development Authority said Friday the enforcement of the rice tarriffication will resolve food supply issues and improve the country’s agricultural productivity.
Economic Planning Secretary Ernesto Pernia welcomed the passage of the Rice Tariffication bill by the bicameral conference committee. The two chambers of Congress approved the passage of the bill, which amends Republic Act No. 8178, or the Agricultural Tariffication Act of 1996.
The measure will replace quantitative restrictions on rice imports with tariffs and remove unnecessary government intervention in the rice market.
“We view this as a positive development as the administration’s economic team exhausts all efforts to tame increases in the prices of goods. With only the president’s signature before rice tariffication becomes a law, we are making a big step in the realization of our agricultural reform agenda,” Pernia said.
Pernia said the bicam-approved bill would address not only the tariffication of rice in compliance with the Philippines’ obligation to the World Trade Organization, but it would also enhance food security by increasing the availability and accessibility of cheaper rice to the consuming population.
“The economic team has always been mindful that food remains to be the major contributor to inflation. Efforts to address food supply concerns, especially rice, will definitely help bring down consumer prices,” he said.
Neda’s preliminary estimate showed that headline inflation rate would eased by 1 percentage point if rice prices would be reduced to the level of imported rice. Even with just a P1 per kilo reduction in the wholesale price of rice, headline inflation rate would also be reduced by 0.3 percentage point, it said.
Rice tariffication would also help improve the productivity of farmers and, as a result, enable them to increase their income, Neda said.
The bill provides for the establishment of a rice competitiveness enhancement fund from an annual appropriation of P10 billion for the next six years.
If the tariff revenues exceed P10 billion in any given year, the excess revenue will be plowed back to RCEF to support rice farmers.
“The RCEF will be used to provide key interventions to support our farmers and enhance their competitiveness, including farm machinery and equipment to improve farm mechanization, rice seed development, propagation and promotion, expanded rice credit, and extension services,” Pernia said.
A portion of the rice tariff revenues in excess of P10 billion will be used to provide direct financial assistance to rice farmers adversely affected by the removal of the quantitative restriction.