Rice tariff cut a stab in the back for farmers in Philippines

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Cutting rice tariffs to 15 percent is a stab in the back of the country's three million rice farmers and the grain industry, according to the Federation of Free Farmers (FFF).

The National Economic and Development Authority Board, chaired by President Marcos, approved the new Comprehensive Tariff Program for 2024-2028, which includes the reduction of rice tariff for in- and out-quota rates from 35 to 15 percent.

'NEDA has deprived industry stakeholders of their right to genuine consultation and due process,' FFF national manager Raul Montemayor said yesterday.

'Normally, proposed tariff changes undergo hearings conducted by the Tariff Commission. Recommendations are then given to the NEDA Board. This procedure was not followed before the lowering of the rice tariff,' he explained.

Montemayor recalled that during the 2023 Senate hearings on the ratification of the Regional Comprehensive Economic Partnership trade treaty, the executive branch assured rice farmers that rice and other sensitive agricultural commodities would not suffer diminution in tariff protection for the duration of the agreement.

'That honorable commitment has been rendered worthless by the NEDA Board,' he said.

'Our experience since trading in the rice industry was liberalized under the Rice Tariffication Law and tariffs were lowered also on non-ASEAN rice imports, (it) has not been salutary. Our dependence on imports from the volatile world market has grown from 10 percent of total domestic consumption to around 25 percent. Rice retail prices have risen,' he added.

Claims that the 15 percent rice tariff will provide a major and lasting relief to consumers are 'more a shot in the dark than a probable result,' Montemayor said.

Stakeholders

Agriculture Secretary Francisco Tiu Laurel Jr. yesterday met with industry stakeholders as part of Marcos' directive to reduce the retail price of rice in the country.

'President Marcos wants more affordable rice prices to ease the financial strain on consumers, particularly the poor, as well as relieve price pressures that have kept inflation elevated and interest rates high,' Tiu Laurel said.

Marcos has lowered rice tariffs until 2028 to bring down rice prices to P29 per kilo, Socioeconomic Planning Secretary Arsenio Balisacan said.

Tiu Laurel said the Department of Agriculture (DA) has started the trial selling of rice at P29 per kilo at select Kadiwa centers.

During the consultation, rice industry stakeholders vowed to cooperate in lowering rice prices.

The newly approved tariff rates aim to ensure access and affordability while balancing the interests of consumers and local producers, Balisacan said.

This would benefit poor households, including beneficiaries of the government's conditional cash transfer program or the Pantawid Pamilyang Pilipino Program, he said.

Lower prices

Cutting rice tariffs from 35 to 15 percent will substantially reduce rice prices in the market, Speaker Martin Romualdez said yesterday.

'The import levy reduction and the direct sale of imported rice by the government through its Kadiwa centers should bring down the retail price of rice substantially, especially for consumers,' Romualdez said.

Farmers should not worry about the government assistance they receive through the Rice Competitiveness Enhancement Fund set up under the Rice Tariffication Law, he noted.

As of May, the fund had accumulated P16 billion from import tariff collections, he added.

'This means that the government has enough funds to help farmers, while it is trying to bring down rice prices through the import tariff cut and direct Kadiwa sales,' he said.

House Deputy Minority Leader Mujiv Hataman also welcomed the tariff cuts.

'We welcome the executive order being prepared to reduce the tariff rates on rice and other commodities, as this also aims to reduce the price of rice in the market. The lower the prices, the better for everybody,' he said.