The Senate is inching closer to approving its own version of rice tariffication bill, which seeks to remove the licensing power of the National Food Authority (NFA) once the quantitative restriction (QR) on the staple is scrapped.
The Senate Committee on Agriculture and Food issued last week its committee report which was submitted to President Duterte. The report informed Duterte that the committee has approved Senate Bill (SB) 1998, which substitutes all the pending bills at the Senate to convert the rice QR into tariffs.
The committee report was signed by the chairs of the Committees on Finance, Ways and Means and Agriculture and Food.
Under SB 1998, the NFA’s regulatory powers, which include accreditation and licensing of rice traders and importers, would be removed.
“The NFA shall no longer establish rules and regulations governing the importation of rice and issue import licenses or permits for the private sector,” the report read.
“Likewise, the power of the NFA to first certify the existence of a shortage before importation is allowed is hereby removed,” it added.
The bill is seeking to mandate all importers to secure sanitary and phytosanitary import clearance from the Bureau of Plant Industry in lieu of import permits.
“All importers of rice are required to secure a sanitary and phytosanitary import clearance from the Bureau of Plant Industry prior to importation in accordance with existing laws, rules and regulations,” it read.
However, the bill does not remove the buffer stocking role and market intervention powers of the NFA.
Under the bill, the NFA would maintain a rice stockpile equivalent to the country’s national consumption requirement computed by an interagency committee constituted by the NFA Council (NFAC).
“This reserve requirement shall be maintained at any given time to address calamities and emergency situations, and for price stabilization during the traditional lean months,” the bill read.
However, the NFA would be only allowed to undertake direct rice importation when the local production is not sufficient “for the purpose of maintaining the required buffer stock to ensure rice security.”
The bill also empowers the President to bring down the tariffs further for a specific import volume in times of “impending rice shortages.”
However, the rice shortage situation shall be determined first by an interagency technical committee and confirmed by the NFAC.
The President’s power to bring down tariffs, through an executive order, could be exercised even when Congress is in session, the bill stipulated.
Under the bill, rice imports coming from Asean member-countries would be levied with a 35-percent tariff regardless of quota.
The most favored nation rates for in-quota rice imports would be at 50 percent, or the tariff equivalent calculated under existing World Trade Organization agreements, whichever is higher.
Furthermore, the bill would remove the export restriction on rice but subject to rules and regulations and guidelines formulated by the NFA and approved by the NFA Council.
“The NFA shall determine fees and charges of rice exports which shall, likewise, be approved by the NFA Council and shall collect taxes and charges from such exports,” the bill read.
The bill calls for a special safeguard duty on rice to protect farmers the local industry from “sudden or extreme price fluctuations.”
Like its counterpart that was recently approved by the House of Representatives, SB 1998 seeks the set up of a rice competitiveness enhancement fund (RCEF) that would earmark all tariff revenues from imports to rice farmers.
An initial P10 billion funding would be shelled out by the government to kick-start the RCEF and the programs mandated by the bill.