DA: P20B for farmers a must with rice tariffs

THE national government must spend P20 billion to roll out interventions that will help rice farmers cope with the scrapping of the quantitative restriction (QR) on rice if it wants the price of the staple to drop by P7 per kilogram (kg).

Agriculture Secretary Emmanuel F. Piñol also said the decline in prices will not happen immediately after the QR on rice is replaced with tariffs. The Department of Finance projected in December that the price of the staple will go down by P7 per kg if the import quota is replaced with a 35-percent tariff.

“[The decline in prices] may happen in three to  four years; maybe at the end of the term of the President,” Piñol told reporters at the sidelines of the Department of Agriculture’s (DA) budget hearing at the House of Representatives on Thursday.

“[This will happen] provided that all the tariffs collected from rice imports will go to the rice sector,” he added.

Bills that would amend Republic Act (RA) 8178 and convert the country’s rice QR into tariffs prescribe the set up of a rice competitiveness enhancement fund. The RCEF will consist of all the tariffs collected from rice imports and would be earmarked for the development of the rice sector.

Based on their estimates, Piñol said the RCEF would amount to around P21.6 billion annually, based on an import volume of 2 million metric tons (MMT) at an average quotation of $500 per metric ton.

“If that happens, then our farmers will be able to improve their productivity, increase their production and lower their cost of production. In the process, we will be able to compete with imported rice being brought into the country,” he said.

“And in that process, we will realize the statement of the President that the price of rice in the market would go down by P7 [per kg]. What the President announced would only be felt when all the support to the rice industry has been delivered,” Piñol added.

Amending RA 8178

The agriculture chief also said he supports the amendment proposed by Albay First Representative Edcel Lagman to House Bill (HB) 7735, or the Revised Agricultural Tariffication Act. The bill seeks to amend RA 8178 to remove the QR on rice and replace it with tariffs.

“It puts an unequivocal and clear statement in the law that the tariffs collected from rice imports would automatically go to the RCEF. It will assure that the rice industry could stand up an inundation of imported rice,” Piñol said.

“It will give an assurance to both members of Congress who are pessimistic about the effectiveness of tariffication and of course, industry stakeholders, [who will make] a little sacrifice, which is to allow imported rice to compete with them. They will be protected by the government, that’s what Congressman Lagman wants,” he added.

During the DA’s budget hearing, Lagman said he seeks to put a “clearer” language in one of the provisions of the tarrification law that would exempt the collected rice import tariffs would be automatically approriated to the RCEF.

“Proceeds from the fund should not be subject to [General Appropriations Act]. It should be released automatically by the [Department of Budget and Management] on a periodic basis,” he said.

“So that we are not going to debate anymore how the fund will be appropriated. This will also assure the amount will be released to RCEF automatically. So that we will be able to help the DA and the country,” he added.

 Image credits: Beverly de la Cruz

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