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Neda: Rice tariffication to stabilize inflation

The National Economic and Development Authority said the immediate enactment into law of the Rice Tariffication bill will stabilize food prices and overall inflation rate.

Economic Planning Secretary Ernesto Pernia said once signed into law, the Rice Tariffication bill would make rice affordable from various sources. Rice supply will also no longer the sole responsibility of the National Food Authority.

The measure amends the two-decade-old Republic Act No. 8178, or the Agricultural Tariffication Act of 1996, and replaces the quantitative restrictions on rice imports with tariff.  

The bill, which was ratified by both chambers of Congress on Nov. 28, 2018, is set to be transmitted to Malacañang for President Rodrigo Duterte’s signature.

“The aim of the bill is to make rice accessible and affordable to every Filipino, and to make the rice sector competitive,” Pernia said.

Under the new rice importation regime, legitimate rice traders can now import rice without NFA permits, provided they secure a sanitary and phytosanitary import clearance from the Department of Agriculture-Bureau of Plant Industry and pay the appropriate tariff to the Bureau of Customs.

The NFA, on the other hand, will focus on ensuring sufficient buffer stocks to address emergency situations.  As there is a need to periodically replenish the buffer stocks, NFA can still sell cheap rice, but to very targeted markets. 

“In selling rice, the NFA may opt to focus on far-flung areas, which some private traders may not find profitable to serve,” Pernia said.

Pernia said wven with rice tariffication, rice subsidy under the government’s conditional cash transfer program or the Pantawid Pamilyang Pilipino Program would continue benefiting poor households.

Pernia said that through the establishment of the Rice Competitiveness Enhancement Fund coming from the tariff revenues, the Agriculture Department would have an additional source of funding for its programs and projects to increase the productivity and enhance the competitiveness of the sector.

Key interventions to be financed by the RCEF include farm machinery and equipment to improve farm mechanization, rice seed development, propagation and promotion, expanded rice credit, crop diversification and extension services. 

A portion of the rice tariff revenues in excess of P10 billion will be used to provide direct financial assistance to rice farmers.

The measure also provides safety nets to the rice sector as it grants the president emergency power to increase, reduce, or adjust existing tariff rates to safeguard Filipino farmers. 

The bill also provides the imposition of a special safeguard duty on rice in case of extreme or sudden price fluctuations in accordance with RA 8800 or the Safeguard Measures Act.

The bill empowers the president, for a limited period and for a specified volume, to allow importation at lower rates for the benefit of consumers in the event of possible rice shortage.

Pernia asked the DA, along with the Department of Trade and Industry and other concerned agencies, to carry out information dissemination campaigns on the new rice importation regime and ensure that rice traders are ready to participate when the bill is enacted into law. 

“Increasing the number of market players and competition in the rice sector are critical for the bill to deliver on its promise of lower rice prices for everyone,” Pernia said.

Topics: National Economic and Development Authority , Neda , Rice Tariffication bill , inflation rate , Economic Planning Secretary Ernesto Pernia
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