Bernadette D. Nicolas & Jasper Emmanuel Y. Arcalas
A DAY before a bill that will open up the country’s rice market lapses into law, Malacañang said the proposed Rice Tariffication Act is still on the desk of President Duterte.
The measure, which seeks to convert the quantitative restriction (QR) on rice into tariffs is set to lapse into law on February 15 if it is not acted upon by the President.
Presidential Spokesman and Chief Presidential Legal Counsel Salvador S. Panelo said in a radio interview that he also got word from Executive Secretary Salvador C. Medialdea on Wednesday that the bill was “for signing.”
As of press time, the Malacañang Records Office and the Presidential Legislative Liaison Office also told the BusinessMirror that they had yet to receive a signed rice tariffication bill.
However, the Office of the Deputy Executive Secretary for Legal Affairs told the BusinessMirror that it has already recommended the bill for the President’s approval on February 12 and that it has forwarded the bill to the Executive Secretary’s office.
Rice, considered the staple food of Filipinos, is the remaining crop that is protected by import caps allowed by the World Trade Organization given its importance to the Philippines. Manila converted most of the QRs and other non-tariff measures into tariffs after the country joined the WTO in 1995.
Malacañang earlier said that the President will not veto the bill even if the President acknowledged that it will be detrimental to farmers.
Bracing for change
Ahead of the possible enactment of the rice tariffication bill, the National Food Authority (NFA) on Thursday pronounced that it is already prepared for the necessary adjustments that must be made under the measure that will liberalize the industry.
NFA OIC-Administrator Tomas Escarez said the food agency has a marching order from Agriculture Secretary Emmanuel F. Piñol to ready the necessary facilities and manpower to fulfill its presumed role under the rice tariffication bill, which is currently awaiting the signature of President Duterte to become a law.
“We are already ready for our buffer-stocking role [under the rice tariffication bill]. We have already instructed all NFA warehouses nationwide to be open daily for seven days a week,” Escarez told reporters in an interview.
“We have also prepared our post-harvest facilities to assist farmers and formed teams for procurement. We have an instruction from the DA [Department of Agriculture] to prepare [for rice tariffication],” Escarez added.
He said the future of the NFA’s role to sell rice in the market remains unclear until the implementing rules and regulations (IRR) of the rice tariffication bill are finalized. The rice tariffication bill has no clear language or provision on what will happen to the NFA’s market power.
The rice tariffication bill, which industry stakeholders described instead as a “rice liberalization” measure, will convert the country’s two-decade long quantitative restriction into tariffs and will also remove from NFA’s regulatory and trading powers.
“It is still possible for us to continue to sell rice if it would be included in the IRR. It is really up to the IRR,” Escarez said.
Nonetheless, Escarez said the NFA would abide by the provisions of the rice tariffication bill once it is enacted, either through Duterte’s signature or it lapses into law on February 15.
Provisions
A day after the rice tariffication bill was transmitted to Malacañang on January 15, rice industry stakeholders and even a top official of the agriculture department urged President Duterte to veto the measure, particularly because of the provisions that seek to deregulate the NFA.
This means that the measure will strip the NFA of its power to control the volume of rice imports entering the Philippine market, as well as of its capacity to license importers.
Under the proposed law, interested importers will only need to secure a sanitary and phytosanitary import clearance from the Bureau of Plant Industry as proof of the rice they will bring in is safe for consumption.
They will also have to pay a tariff of 35 percent if the imports are coming from a member-state of the Association of Southeast Asian Nations, while 50 percent if they are from outside the region.
The proposed law will also create the Rice Competitiveness Enhancement Fund (RCEF), also called the rice fund, which will consist of an initial P10 billion and all duties collected from the importation of rice. As a safety net, the rice fund will be used to finance programs —whether through direct support or research—for farmers.
Under the bill, 50 percent of the RCEF is to be used for the purchase of rice farm equipment, such as tillers, tractors, seeders, threshers, rice planters, harvesters, among others, for purposes of improving farm mechanization.
Also, 30 percent of the rice fund will be allocated for the development, propagation and promotion of inbred seeds to rice farmers. The bill sets aside 10 percent for credit with minimal interest to farmers and cooperatives.
The remaining 10 percent is for research and education on rice crop production, modern rice farming techniques, seed production, farm mechanization, as well as technology transfer through farm schools nationwide.
Image credits: Roy Domingo