The supply of rice, hopefully, will no longer be an inflation driver once President Rodrigo Duterte signs the rice tariffication bill into law shortly.
Rice tariffication will essentially lift the restrictions on the volume of rice allowed to enter the Philippines by letting private traders import the grain from countries of their choice. President Duterte two months ago certified the bill as urgent after the inflation rate kept surging.
In endorsing the bill, Duterte told Congress the proposed measure would address the urgent need to improve the availability of rice in the country, prevent artificial shortages, reduce the prices of the commodity in the market, and curtail the prevalence of corruption and cartel domination in the rice industry.
Private traders under the rice liberalization move will pay a straight 35-percent tariff on rice imported from Southeast Asian Nations. They will also no longer be constrained by the National Food Authority, which virtually monopolized rice importations and reserved the right to choose which traders could purchase rice from abroad.
Rice tariffication will also reduce the role of the NFA in the importation of the grain and foster competition in the domestic market.
With the private sector taking care of rice shipments, the NFA and the Department of Agriculture can now focus on improving the productivity of Filipino farmers to counter the influx of cheaper imports and taking real efforts to modernize the farming sector.
Higher prices of rice in the past few months drove the inflation rate to a nine-year high in September and October, after the NFA ignored the supply situation and failed to replenish dwindling stocks with imports. Rice was the number one contributor to surging inflation and accounted for over half of the price spikes, along with other food items.
The government, especially the Agriculture department, should rise to the challenge of rice tariffication. It should strive to make the Philippine rice sector competitive again and eventually restore the country’s status as a rice exporter in the region.