The Rice Tariffication Law (RTL)—Republic Act 11203—was signed in 2019 to bring down the price of rice and help farmers who would be hurt by the removal of quantitative restrictions on imported rice. Under the RTL, our rice farmers were assured they will remain protected by a relatively high tariff wall of 35 percent to 40 percent.
The Neda said the Rice Tariffication Law is the best model that we have to help both farmers and consumers. By removing quantitative restrictions, Neda said RTL will be able to address both the needs of consumers for a lower retail price of rice and use the tariff revenues to fund the Rice Competitiveness Enhancement Fund (RCEF) that will provide assistance to farmers.
Farmers were vigorously against the rice tariffication measure when it was being debated in Congress. However, President Duterte’s economic team was united in its vision to reform the rice sector. Agriculture Secretary Emmanuel Piñol was the lone voice opposing the measure. But his fellow Cabinet members and finally the President were persuasive in convincing Piñol about the economic benefits of their proposal.
Farmer groups said the RTL made their situation worse. Long on promises, the RTL miserably failed to bring down the price of rice. “Analysis of data from the Philippine Statistics Authority revealed that consumers saved a measly P52 per year during the first three years of the Rice Tariffication Law, which opened up the domestic market to unlimited volumes of cheap imports,” the Federation of Free Farmers said.
When the rice cartel started hoarding after India announced a rice export ban, rice prices skyrocketed. In response to surging rice prices, President Marcos imposed a price ceiling of P41 per kilo for regular milled rice and P45 per kilo for well-milled rice.
The Tariff Commission on Friday held a public hearing on the proposed reduction of rice import tariff rates. The Department of Finance wants to cut the 35 percent rice import tariff rates “temporarily to 0 percent or maximum of 10 percent to arrest the surge in rice prices.”
Various groups called the hearing a farce. In a statement, the Samahang Industriya ng Agrikultura, Federation of Free Farmers (FFF), Philippine Confederation of Grains Associations, Kilusang Magbubukid ng Pilipinas, Pambansang Mannalon, Mag-uuma, Magbabaul, Magsasaka ng Pilipinas, and National Movement for Food Sovereignty, called the hearing “a sham public consultation.”
Raul Montemayor, FFF national manager, said “the exercise is designed to make it appear that stakeholders are being consulted on the proposal.” But the timing stinks because farmers are about to harvest the main season crop, and rice prices will naturally go down.
“Encouraging additional imports through tariff reduction will further depress palay prices and discourage farmers from expanding their future production, thereby making the country even more dependent on imports,” Montemayor said.
At an average landed cost of P27.34 per kilo of imported rice, he said the tariff at 35 percent is P9.57 per kilo, while at 10 percent rate the tariff will go down to P2.73 per kilo. Should the rate be slashed to 10 percent, the tariff reduction would be about P6.83 per kilo. “So, the potential reduction in the price of rice is about P7 per kilo. If we assume that rice prices go down by P7 per kilo, the effect of that in palay price would be about P4.44 per kilo reduction,” he said.
“If there is a direct transmission in tariff reduction into a reduction in palay prices, multiply that by palay production in 2022 [at 19.75 million metric tons], the farmers’ losses will be about P88 billion in terms of reduced income,” Montemayor said.
The farmers said even the US, the richest country in the world, maintains a strong safety net for America’s farmers, which includes disaster assistance, crop insurance, technical assistance, and access to credit.
The Rice Tariffication Law’s 35 percent tariff wall is there to protect the farmers. Now they want to remove the only safety net for millions of Filipino farmers. “Why don’t they just make a Rice Zero Tariff Law to avoid giving us false hopes,” an irritated farmer said. “They should know that the whole nation suffers because of the rice cartel. This is the solution where they should focus on.”
