70% rice tariff, urgent rice safeguards implementation asked

October 2, 2019         

A rice tariff of at least 70%, as sanctioned by the Rice Tariffication Law’s (RTL) safeguards provision, was pressed to be urgently implemented by government to arrest further imports hitting beyond all-time high records, saving Filipino farmers.

   The safeguards will also save government from needing to spend huge funds for conditional cash transfer or farmers’ loan, now placed by Department of Agriculture (DA) at P15 billion, just to spare Filipino farmers from serious economic damage.

   The private sector, representing thousands of Filipino farmers under its wings in the supply chain, has pegged desired rice tariff to at least 70% in order to beef up global competitiveness of  Filipino produce.

   At the same time, the Philippine Chamber of Agriculture& Food Inc. (PCAFI) asserted that it strongly supports the RTL, contrary to what may be perceived by some groups.

   “We are supporting the law. Therefore let’s implement the law. We want the law, that’s why we want it implemented,” said PCAFI President Danilo V. Fausto.

    PCAFI warned the continuous influx of cheap imported rice may threaten the country’s national security, prompting hungry farmers in the rural areas to resort to joining communist rebels.

   “We have to assess the situation because any further damage may affect our national security.”

   Unlike the position of some groups adversely affected by the RTL, Fausto said PCAFI wants RTL upheld through immediate implementation of its explicit provisions.

   “We’re not asking for a repeal of the law or an amendment of the law.  And if the law says, section 10 of Republic Act there are safeguards, let’s implement it.”

   A tariff rate of at least 70 percent should be reasonable enough to give the Filipino farmers at least the “temporary” yet extra edge against imports.

   “Our palay price is now at around P12 per kilo. But NFA should buy it at P17 (to aid farmers).  At that buying price, it will sell in the retail market at P34 per kilo, when milled.  Then domestic rice will even out with the imported at P34,” said Fausto.

   With price of both domestic and imported rice at same level, “why would you bother importing?”

   Ernesto Ordonez, PCAFI trustee and Agri Fisheries Alliance (AFA) chairman, said the imposition of safeguards from the current 35% level is urgent even as there are trade notification rules involved.

   AFA is composed of five sectors: farmers and fisherfolk, (Alyansa Agrikultura-AA), agribusiness, PCAFI, science and technology (Coalition for Agriculture Modernization in the Philippines – CAMP), rural women (Pambansang Kilusan ng Kababaihan sa Kanayunan – PKKK), and multisectors (Agrifisheries 2025 – AF2025). 

   “We do not want a repeat of the mistake during the 1990’s when we agreed to the too rapid tariff reduction without giving the farmers the necessary support services and the WTO-approved safeguard measures,” said Ordonez.

   Ordonez cited the Department of Agriculture September 9 national survey where imported rice with the 35% tariff caused farmgate wet palay prices in Regions 2, 3, 11 averaged P12.10 a kilo, barely above the P12 production cost.

   CAMP President Emil Javier favored measures like cash transfers and assistance in credit, technology, and marketing.

   AFA stated it rejects calls for a return to government rice import monopoly and supports food security instead of food self-sufficiency.

   “In areas where rice production is not competitive, the government must provide assistance for transition to higher value crops,” said Ordonez.

   The tariff protection under safeguards will just be a temporary, a transitory, policy, PCAFI asserted.

   “DA should immediately implement it as promised it should be by October 1.  Anyway, that will just  temporary, while we’re trying to give our farmers time to upgrade their competitiveness.”

   Now at 2.4 to 2.5 million MT (MT), imports must immediately be curbed.  The Foreign Agricultural Service (USDA)  placed projected import for the year to hit 2.6 million MT.

   Fausto said even a P34 against P34 per kilo Filipino against import price will be enough.

   Imported rice is currently being traded at around P17 per kilo.  With trader’s overhead, it rises to P20 per kilo, and finally to P27, P28 per kilo in the retail market (with logistics costs). 

  “But imported rice should be at least equal the local market price.  That will make them lose over domestic rice.  Now, NFA should ensure farmers dictate the buying price of palay at P17 per kilo for dry and P13, P14 per kilo for wet.”

   PCAFI Trustee Elias Inciong is questioned why some groups may be opposing the safeguards implementation even if they are representing sectors that are not rice-related as compared to suffering rice farmers.

   “They don’t want higher tariff?  Why?  Because it will affect consumers? (or their businesses?)”

   But PCAFI, some of whose members themselves plant rice in poverty stricken, rural areas, want more protection for precious but few Filipino farmers that remain sustaining to raise the country’s food security.

   Under Republic Act 880, the Safeguard Measures Act, safeguards may be imposed in the following conditions (Rule 2.2a-c) all of which conditions are reported to have been happening after the RTL implementation:

  • significant idling of productive facilities in the domestic industry including the closure of plants (rice mills) or underutilization of production capacity
  • inability of a significant number of firms to carry out domestic production at a profit
  • significant unemployment or underemployment within the domestic industry.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.