The policy flaws in RTL

The Rice Tariffication Law (RA 1123) enacted on March 5, 2019 to replace quantitative restrictions on rice imports to liberalize trade, reduce rice prices (which did not happen) and enhance the competitiveness of local rice farmers, has gaping holes that made life more miserable to farmers and consumers alike.

As Prof. Ted C. Mendoza wrote in Inquirer: “The decline in palay (unmilled rice) prices to P8 per kilo– resulted in massive income losses for farmers of P250 billion or four times greater than the damage left by Super Typhoon Yolanda” ( in 2013).

It not only dismantled the National Food Authority’s presence in the market, liberalized rice imports and exposed Filipino farmers to global price shocks, it also benefited only those traders, importers and those involved in rice trade that operated like a cartel.

The RTI did not even have adequate safeguards to cushion the impact on local farmers.

Despite amendments tripling the Rice Competitiveness Enhancement Fund (RCEF) to ₱30 billion, the law remains irreparable. Its design privileges importers, weakens domestic production incentives, and undermines national food sovereignty, he said.

A proposed law– the Rice Industry Sustainable Development Act (RISDA) seeks to restore the dignity of farmers, embeds climate resilience, and reclaims rice as a pillar of Filipino self-reliance. It is a systemic overhaul of RTL by integrating economic, ecological, and institutional reforms to rebuild the rice sector from the ground up. At its core is a commitment to guaranteed procurement, price stabilization, and farmer empowerment.

RISDA tasks the state to buy at least 20% of the national palay harvest at a floor price of ₱25/kg—adjusted annually to ensure a 30% net return above production cost.

This procurement mandate is a “strategic intervention to dismantle rice trader cartels and restore market fairness. Drawing lessons from India’s Minimum Support Price (MSP) system and Thailand’s farmer price support schemes, RISDA repositions the NFA as a proactive market stabilizer,” Mendoza said.

Beyond procurement, RISDA institutionalizes a robust price support mechanism through a dynamic floor price calibrated to grain yield, inflation, and production costs so that farmers earning 5 tons per hectare receive a net income of ₱50,000 per hectare per crop—an income floor that reflects both dignity and viability. 

RISDA empowers the NFA to intervene during harvest seasons, buying palay when market prices fall below the threshold, thereby shielding farmers from predatory pricing.

A rice import parity clause mandates importers to buy 60% local rice for every 40% of their import volume to create competitive demand for domestic palay and curb speculative importation.

To prevent price manipulation and hoarding, RISDA enforces strict penalties on profiteering, price gouging, and artificial scarcity. Licensed traders must submit periodic inventory reports, and the NFA with the Department of Trade and Industry (DTI) will conduct regular market surveillance.

Public price bulletins and digital reporting platforms will empower consumers to monitor rice prices and report violations, democratizing market oversight.

RISDA restores the quedan system—a warehouse receipt mechanism that allows farmers to deposit palay in accredited warehouses and use the receipts as collateral for low-interest loans. (To recall, an agency named Quedan Corp under the NFA before was smoothly operating then until corruption crept in).

Quedan delays market disposal until prices improve, reducing vulnerability to post-harvest price crashes.

Cooperatives will manage community warehouses, strategically located near production zones, and participate in buffer stock programs. Blockchain-based tracking and third-party audits will ensure transparency and accountability.

Programs for farmers under RISDA include the construction and rehabilitation of irrigation systems, prioritizing rainfed and drought-prone areas.

Solar and gravity-fed networks will be developed, especially in upland and indigenous communities.

Post-harvest facilities like drying centers, milling facilities, and climate-controlled storage hubs will be built in strategic municipalities, with cooperatives given priority access to equipment grants.

Farm-to-market roads will be geospatially planned, with 10% of the Department of Public Works and Highways (DPWH) budget earmarked for rice-producing regions.

RISDA embeds climate resilience through agroecological transition incentives to be provided to farmers who regenerate soil carbon, adopt low-emission practices, and manage local seed banks.

A national hybrid rice seed independence program will be launched, targeting 50 percent local seed production coverage within four years. Research institutions and state universities will collaborate with farmer-led organizations to develop climate-resilient varieties, biological pest control systems, and diversified cropping models.

RISDA also creates the National Rice Sustainability Council (NRSC)—a multi-sectoral body composed of government agencies, farmer cooperatives, academics, civil society, and local governments to develop a National Rice Industry Roadmap, harmonize efforts across stakeholders, and monitor rice production, supply, and food prices. RISDA recommends  90-day rice buffer stock to safeguard against supply disruptions, price volatility, and emergencies.

Regional reserves will be established in disaster-prone areas, and replenishment will prioritize domestic procurement. 

Funding for RISDA will be sourced from the budget, with a recommended 10% allocation for rice sufficiency, upon advice of the UNFAO.

Government corporations will be mandated to buy palay at the guaranteed floor price, ensuring a minimum 30% net return above production cost.

Investments in agricultural R&D, climate-resilient infrastructure, and cooperative capacity-building will be scaled up to secure long-term food sustainability.

To summarize, RISDA offers a forward-looking, systems-based reform that redefines rice governance in the Philippines. It corrects the structural failures of RTL, restores the procurement mandate of the state, and embeds farmer dignity, youth empowerment, and climate resilience into national policy.

By drawing lessons from Asia’s leading rice producers, Vietnam, Thailand, India, Pakistan, and China, while rooting its architecture in Filipino realities, RISDA is a moral imperative and a strategic necessity, Mendoza stressed.