The country biggest union of farmers said the government’s plan to lift tariffs on imported rice is ill-timed because of the start of the wet season harvest.
“If we reduce the tariffs now, it will send the wrong signal to our farmers and discourage them from increasing their production. Then, we will have our supply problems again next year,” said Federation of Free Farmers (FFF) chairman Raul Montemayor.
He said there is no need for rice imports, as harvest is about to peak.
The FFF said the expected harvests would be enough to meet demand until May 2024 in time for the dry season harvest.
Montemayor, however, asked the government to prepare for the lean months next year from July to September.
The FFF also said the reduction of tariff on imported rice from 35 percent to 0 would mostly benefit high-income consumers. It said most of the rice being imported is premium-grade.
“This is because the import price difference between premium and regular rice is very small, whereas the profit margins for the former are much larger. Any reduction in tariffs will benefit the buyers of premium grades of rice, not ordinary consumers who prefer to buy cheaper rice,” Montemayor said.
He noted that even before the current crisis, retail prices of rice barely moved despite the entry of cheap imports.
The group alleged that since the passage of Rice Tariffication Law (RTL) in 2019, the government turned a blind eye on massive undervaluation of rice imports, which result in a de facto reduction in tariffs.
“This has not resulted in cheaper rice. Importers and traders are the ones raking in profits from imports. It is not surprising that the FFCCII [Federation of Filipino-Chinese Chambers of Commerce and Industry, Inc.], whose members most probably include some of these large importers, support a further reduction in tariffs,” Montemayor said.
The FFCCCII earlier said it supports the proposal to bring down tariff rates on imported rice to 10 percent and if viable, to 0 percent from 35 percent, amid the current supply gap and high prices of rice.
The FFCCCII said the tariff reduction would not only bring down rice prices and temper the increasing food inflation, but also address the demand-supply gap in the sector.
“This move will undeniably mitigate the pinch our countrymen are feeling due to the sharp increase in the price of rice, our staple food. We believe that the temporary lowering of tariff, coupled with other calibrated measures to be taken by this administration’s economic team, will result in the long-term stabilization of the prices of rice and improve the inflation situation,” said FFCCCII president Cecilio Pedro.
