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Friday, January 17, 2025
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Friday, January 17, 2025

Gov’t asked to restore 35% tariff on rice imports to help farmers

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The Federation of Free Farmers (FFF) asked the government to reinstate the 35-percent tariff on rice imports, claiming that the tariff reduction to 15 percent under Executive Order 62 benefited importers and wholesalers while harming farmers by driving down farmgate prices.

An FFF analysis of Bureau of Customs (BoC) data on rice imports revealed that average import prices dropped by about P9 per kilogram between July and December 2024 compared to the first half of the year.

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The decline was attributed to the tariff reduction, which contributed roughly P6 of the decrease, and a modest softening of international rice prices, accounting for around P3 per kilogram, the group said.

Philippine Statistics Authority (PSA) data showed that retail prices for well-milled rice decreased by only P2 per kilogram during the same period.

The FFF pointed said importers and wholesalers retained most of the P7-per-kilo savings, while retailers saw minimal trading margin growth of just P0.30 per kilogram.

The report claimed that retailers were largely responsible for the persistently high rice prices.

The FFF estimates that if the full savings from tariff cuts were passed on to consumers, retail prices could drop significantly.

Rice with 5-percent broken grains could be sold for P50 per kilogram, down from P54, while regular-milled rice with 25-percent broken grains could retail at P45 per kilogram, or P5 lower than its current level of P50.

The reductions would still allow importers, wholesalers and retailers to maintain reasonable profit margins, the FFF said.

The FFF said foregone customs revenues from the tariff cuts amounted to P14.4 billion as of December 2024, reducing funds earmarked for palay farmers under the Rice Tariffication Law (RTL).

“If the government cannot discipline the importers and wholesalers, it might as well restore the tariff rates to 35 percent. Retail prices should not increase because we will just be removing the extraordinary profits that the middlemen have pocketed,” said FFF national manager Raul Montemayor.

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