THE Federation of Free Farmers Inc. (FFF) is urging lawmakers to review the rice trade liberalization (RTL) law in light of falling palay prices and reimpose the powers of the government to place quantitative restrictions on imports under certain conditions.
In a statement on Wednesday, the FFF asked Congress to conduct an immediate review of the law that ordered the deregulation of the rice industry, paving the way for easier entry of imports.
The FFF made the call following reports they received from farmers that wet palay prices have dropped to between P11 per kilogram and P13 per kilogram and P14 per kilogram to P17 per kilogram for dry palay.
The prevailing market prices, the group pointed out, are “significantly lower” than the National Food Authority’s (NFA) P19 per kilogram buying price for dry palay.
The P12 price prompted Senate President Pro Tempore Ralph Recto to lament that this made palay much cheaper than a face mask or face shield used as safeguard against Covid-19.
“Prices are expected to go down even more when harvests reach their peak in October and November,” the FFF said.
Uncontrolled imports
The FFF attributed the price declines to “uncontrolled entry of rice imports and uncertainty over [Department of Agriculture’s] policy for the decline in prices this early in the harvest season.”
“Many traders are playing safe and buying low because imports might flood the market again like last year and make it unprofitable for them to dispose of their stocks,” it said.
“Other traders have decided not to take risks and have reportedly stopped buying for the meantime. Difficulties in drying and transporting grains and the limited outreach of the NFA have also contributed to the drop in prices,” it added.
The FFF is proposing that Congress amend the law and reinstate government’s powers to allow the temporary imposition of quantitative restrictions during times that imports have caused injuries to the domestic sector, in this case the palay farmers.
“The FFF has proposed that the law should make it mandatory for the DA to avail of the safeguard provisions of the WTO and local laws. This will allow the government to impose additional customs duties on imports for a specified period in the event of an import surge and proof that the surge has caused significant harm to local farmers,” it said.
The BusinessMirror first broke the story in March 2019 that the version of the RTL law that was passed removed the government’s authority to reimpose import restrictions in times when an import surge causes harm or injury to the local agriculture sector.
Then Agriculture Undersecretary Segfredo R. Serrano told the BusinessMirror that reimposing QR as a general safeguard measure, which is allowed under WTO rules, has become a “collateral damage” and is now “useless” since the RTL law was enacted.
(Read story here: https://businessmirror.com.ph/2019/03/14/what-philippines-gave-up-with-the-recent-enactment-of-rice-trade-liberalization-law/)
Other proposals
The FFF explained that the RTL law has tied the hands of the government in addressing crisis situations, citing the cancellation of the planned rice importation by the Philippine International Trading Corp. (PITC) that did not have any legal basis under existing laws.
The FFF also argued that programs funded by the Rice Competitiveness Enhancement Fund (RCEF) are experiencing delays in implementation since the law mandated small research agencies to oversee the programs.
“The FFF has also proposed the restoration of a provision allowing farmers to be represented in the management and monitoring of the RCEF,” it said.
“This provision was contained in the House version and the RTL’s draft Implementing Rules and Regulations, but was inexplicably removed from the final version of the law,” it added.
Image credits: Bernard Testa