"While the law certainly has birth pangs, it would help farmers become more competitive over time and also lower inflation rates."
"While the law certainly has birth pangs, it would help farmers become more competitive over time and also lower inflation rates."
Should the six-month-old Rice Tariffication Law (RTL) be given the chance to work to address rice supply issues in the country?
Yes, according to our economic managers and lawmakers who crafted the law.
The law provides for the establishment of the Rice Competitiveness Enhancement Fund (RCEF), which will funnel P10 billion annually to the rice sector in the next six years. The RCEF is allocated for the procurement of farm machinery and equipment; rice development, propagation and promotion; and expanded rice credit and extension services.
The law also aims to protect local farmers from the entry of more imported rice into the country through the imposition of a 35-percent tariff on rice coming from member-countries of the Association of Southeast Asian Nations (ASEAN) such as Thailand and Vietnam.
“Under the law, the mandatory review of P10-billion rice competitiveness enhancement funds would only be conducted by both Congress on the sixth year or year 2025,” Socioeconomic Planning Secretary Ernesto Pernia said, brushing aside the suggestions of food security advocates and consumers groups to repeal the law.
As a safety net, the law also grants the President the power to increase, reduce, revise or adjust existing tariff rates to protect Filipino farmers.
Review of the RTL is not needed at this point, according to Finance Secretary Carlos Dominguez III, who noted the significant improvement in rice prices in the market since it came into effect.
“We should let the rice liberalization law, which is three decades late, do its work and give the economy time to adjust for the further easing of rice prices for more than 100 million Filipinos,” Dominguez said. He cited the law as one of the most important legislative achievements of the 17th Congress and the Duterte administration. Agriculture Secretary William Dar conceded that although the RTL had “birth pangs,” he believes it would help farmers become more competitive over time and also lower inflation rates.
Dar explained that prices had already been dropping even before Duterte signed the RTL on Feb. 14 this year. He also admitted that the assistance from RCEF has yet to benefit local farmers since the money had just been collected by the BOC last month.
Farmers’ groups had lamented that rice tariffication has been disadvantageous to them because retailers chose to purchase cheaper rice imports instead of rice from local producers.
However, Senator Cynthia Villar, the principal author of RA 11203, disputed their claim, pointing out that the law serves as the final compliance by the Philippines with its commitments to the World Trade Organization (WTO). Philippine membership in WTO in the past 24 years aimed to counter the impact of the expected influx of cheap rice imports.
Under RA 11203 which amends RA 8178 or the Agricultural Tariffication Act of 1996, rice imports will be charged corresponding tariffs instead of limiting the amount of rice that enter the country,.
The law was crafted to provide for a more focused function for the National Food Authority (NFA), which is to buy palay from local farmers only.
The senator also lamented the attempts by certain quarters to discredit the rice tariffication law. “It is unfortunate that some groups are claiming that the rice tariffication bill which we have scrutinized and carefully studied in the Senate will not be beneficial to farmers. On the contrary, it includes a package of support programs that will help farmers adjust to competition under a tariffied regime,” she said.
“As Filipinos continue to struggle with inflation, the government has found ways to temper rising inflation and one of this is the full implementation of RTL for the next six years,” Villar said.
She added that these agriculture stakeholders and farmers cooperatives should coordinate with her office and assist them in asking the Department of Budget and Management to immediately release the P10-billion RCEF allocations intended for government agencies implementing the law.
As of July 15, the Bureau of Customs had already collected P6.5 billion in duties from rice imports by private traders following the implementation of RTL in March this year. However, for unknown reasons, the DBM has refused to remit the amount.
Camarines Sur Rep. LRay Villafuerte, a co-author of the rice bill, said the RTL will not only liberalize imports of the staple but also benefit consumers as it will broaden access of Filipinos to cheap rice. This, he said, would “prevent a repeat of the 2018 inflation surge brought in large part by the supply shortfall and the subsequent increase in retail prices of rice.” We agree completely.