Rice-tariff bill up for plenary deliberations

In Photo: The National Food Authority stores its buffer rice stock consisting of imports and paddy it purchased from farmers in its warehouses. (FILE PHOTO)

The House of Representatives is eyeing to start next week plenary deliberations for a measure that would amend Republic Act (RA) 8178 to abolish the quantitative restriction (QR) on rice.

This, after the House Committee on Appropriations, chaired by Rep. Karlo Alexe B. Nograles of the First District of Davao City together with the House Committee on Agriculture and Food, chaired by Party-list  Rep. Jose T. Panganiban Jr. of Anac-IP, endorsed on Tuesday for plenary approval the unnumbered substitute bill, which seeks to replace the rice QR with tariffs.

Nograles adopted the recommendation of the Department of Finance (DOF) and recommended to the House Committee on Agriculture and Food the inclusion of this provision: “the fund shall be in place for the first six years upon the implementation of this act, after which the earmarking of the amount collected for the purpose shall terminate
unless otherwise extended by law.”

However, the panel noted that any remaining balances on the expiration date of the earmarking for the fund shall not revert to the general fund, but will continue to be used for the purpose for which it was set aside.

Under the bill, the rice fund shall consist of all duties collected from the importation of rice under the proposed law.

The appropriations panel’s recommendation was accepted by Panganiban, saying “this is for the benefit of the farmers.”

With the support of the leadership of the lower chamber, Panganiban has expressed confidence that the rice tariff will be passed before Congress goes on its Lenten break next month, or on March 21.

“So by next week it will be deliberated at the plenary. We want to finish it here in the lower chamber before our Holy Week break,” Panganiban told the BusinessMirror.

He also reiterated that the Duterte administration, particularly the DOF, wants the bill enacted into law by March 23.

The passage of the law allowing the tariffication of rice is included in the priority bills identified as urgent by the Legislative-Executive Development Advisory Council. It is also one of the priority measures of Congress.

Panganiban has also expressed confidence that the Senate will pass its version of the rice tariff measure soon.

“I think, the Senate will pass its version soon. But, if there is difference between the House and Senate versions of the QR bill, we will all settle that during the bicameral conference committee,” he said.  The Senate has already committed to pass its version of the bill by March.

After approving their respective versions of the rice-tariffication bill, the Senate and the House of Representatives will transmit their bills to a bicameral conference committee to consolidate their versions and to discuss the divergent provisions.

The lower house has set the bound tariff rate for rice imports outside the minimum access volume (MAV) at 180 percent.

Under the substitute bill, the Philippines will impose a bound tariff rate of 35 percent for rice originating from the Association of Southeast Asian Nations region, regardless of volume. Manila would also impose a 40-percent bound tariff most-favored nation (MFN) rate for in-quota rice imports from countries that do not belong to Asean.

Once the substitute bill is enacted into law, the country’s MAV for rice shall revert to its 2012 level of 350,000 metric tons (MT), from the current 805,000 MT.

Earlier, the BusinessMirror reported that Manila has assured the World Trade Organization (WTO) that the Philippines will be able to finally convert its QR on rice into tariffs by June, nearly a year after the government was supposed to have scrapped the nontariff measure.

A Geneva trade official, who was privy to the proceedings of the recent WTO Committee on Agriculture (COA) meeting said  the Philippine delegation had informed WTO member-countries that lawmakers are “fast-tracking and prioritizing” the amendment of RA 8178.

RA 8178, or the Agricultural Tariffication Act, had allowed the Philippines to continue imposing rice quotas even after the WTO waiver on the special treatment on rice had lapsed on June 30.

The Philippines is under pressure to convert its QR into tariff after the waiver on the special treatment on rice expired last June 30. The expiration of the waiver meant that Manila can no longer impose the nontariff measure.

To avoid possible trade disputes, President Duterte issued an executive order which retained the country’s rice concessions as “a sign of goodwill” to the country’s trade partners.

Impact on farmers

The Kilusang Magbubukid ng Pilipinas (KMP) said on Tuesday the removal of the QR on rice will not improve food security and reduce poverty.

Citing studies, KMP Chairman Emeritus Rafael V. Mariano said the income of farmers will drop by 29 percent upon the lifting of the rice QR.

“This is because subsidized cheap rice imports will flood the domestic market, compete with local rice expensively produced by Filipino farmers who lack government support, and depress more the farm-gate price of palay,” said the former chief of the Department of Agrarian Reform.

Mariano said weakening rice production will lead to shrinking agricultural production.

While palay used to account for almost one-fourth of the gross value added (GVA) in agriculture at current prices, the KMP said its GVA has been falling by 10.4 percent annually from 2014 to 2016, contributing to overall agriculture decline of almost 1 percent annually.

“Once the QR is lifted, we expect greater liberalization and a deluge of rice imports under various free trade agreements and the World Trade Organization,” Mariano said.

“This will impact on the livelihood of close to 20 million Filipinos, or about a fifth of the national population, made up of 2.5 million small farmers, several hundred thousand farm laborers and other workers involved in the supply of farm inputs and machinery, milling/processing, warehousing, transport, other services and related economic activities,” he added.

Mariano also said the government should seriously consider disengaging from the Agreement on Agriculture (AoA), which he said, “binds” the local agricultural sector to rice importation policies.

“Decades under the WTO and the AoA proved that importation of rice further drove down the farm-gate prices of palay and increased the window for rice smuggling. The average farm-gate price of rice is P19.29 per kilogram and even lower, as dictated by traders imposing the monopoly prices of rice,” he said.

With Jonathan L. Mayuga

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Turning Points 2018