Gov’t must prep for surge in rice imports

The government must prepare for an expected surge in imported rice following the reduction of tariffs from 35 to 15 percent so that it would not result in further decline in rice self-sufficiency amid climate change threats and global geopolitical disruptions, industry stakeholders said. 

Danilo V. Fausto, president of the Philippine Chamber of Agriculture and Food, raised the group’s grave concerns over Executive Order No. 62, which reduced tariffs on rice and other food commodities until December 2028, as he said the government must reassure the rice sector that it is preparing for a surge in rice imports through the Special Rice Safeguard under RA 11203 or the Rice Tariffication Law. 

“This means determining the volume or price triggers, as the case may be, as soon possible. The last administration, ignoring the said mandatory provision, did not even bother to compute for either one,” Business World quoted him saying. 

Fausto noted the RTL was implemented by the previous administration to benefit traders, to the detriment of consumers and rice farmers. He also claimed the law decreased the country’s self-sufficiency to 75-80 percent from 90-95 percent. 

Under the law, a special safeguard duty on rice “shall be imposed” in order to protect the Philippine rice industry from sudden or extreme price fluctuations. 

This is in accordance with RA 8800, or the Safeguard Measures Act, as well as its implementing rules and regulations, the law stated. 

Fausto said that EO 62 has generated “controversy” due to the non-conduct of “genuine and timely consultations.” He said the National Economic and Development Authority’s (NEDA) insistence that the hearings of the Tariff Commission last year constitute compliance with due process “damages its credibility as a crisis manager.” 

He said that the system is flawed as NEDA, which proposed the tariff cuts, has jurisdiction over the designated fact-finding body, the Tariff Commission. 

“The sectors are left with no choice but to file a case on the issue of due process. By NEDA’s logic, it can go back to hearings conducted 10 or 20 years ago and insist that the proceedings therein would constitute compliance as long as they involved the same sector,” he said. 

“This is dangerous. There will be no more new hearings,” he added. 

But for Raul Q. Montemayor, national manager of the Federation of Free Farmers, the Special Rice Safeguard is “very weak.” 

“The additional tariff cannot exceed 1/3 of the applied tariff. In the case of rice, the maximum additional tariff we can apply is 5%, and it can be applied only from the time we breach the trigger up to the end of the year, even if the import surge spills over to the next year,” Montemayor told Business World. 

“What will be more effective are the general safeguards, where there are no limitations on the additional tariff that can be imposed, and which can be put in place from 200 days up to 2 years. But this needs real-time data to determine if there is a surge and that the surge is hurting farmers,” he added. 

Michael Ricarfort, chief economist of RCBC said the reduced rice import tariffs would mean a 20 percent discount on imported rice since rice is nearly 9 percent of the consumer price index (CPI) basket and imported rice accounts for nearly 1.8 percent of the CPI basket. The reduced tariff would help reduce inflation by 0.36 percent on a standalone basis, he told Business World. But inflation would ease more if locally produced rice prices go down as a result of lower prices and tariffs on imported rice,” he added. 

On the imposition of safeguard duties, he said, it would “effectively increase the price of imported rice and would help support farmgate palay prices and the incomes of palay farmers.” 

Fausto also sought the allocation of more funds to help the agricultural sector through “enhanced guarantees for credit and insurance for farmers and millers.” 

“The government should also create programs to allow local government units to procure agricultural products directly from farmers and cooperatives during “times of surplus or market failure,” he said. 

He also asked the government to boost the National Food Authority’s (NFA) financial and storage capacity to buy more palay. 

Fausto also criticized the EO’s provision allowing NEDA to review the tariffs on rice every four months. “NEDA is a very ideological agency. It has a well-known bias against local producers, especially those in agriculture and fisheries,” he said. RDLC