THE National Economic and Development Authority (NEDA) said it recommends that the next government, to be led by top presidential vote-getter Ferdinand R. Marcos, Jr., continue with the Rice Tariffication Law and use it as a model for other agricultural reforms.
“The Rice Tariffication Law (RTL) is the best model that we have to help both farmers and consumers,” Socioeconomic Planning Secretary Karl Kendrick T. Chua said in a statement.
The law, also known as Republic Act No. 11203, benefits 2 million farmers, 110 million consumers, and thousands of retailers, wholesalers, millers, and those in the warehousing and transport businesses, Mr. Chua said.
“We hope that this and our dialogue with the transition team of the new administration will help them better understand the costs and benefits of the policies that we have proposed. The RTL is the best model to help both farmers and consumers. We are proposing the same model for livestock, poultry, and dairy, and we hope to do that for other crops as well,” Mr. Chua said.
The law replaced the quantitative restrictions on imported rice with deregulated imports, which must pay a tariff of 35% for grain shipped in from the rest of Southeast Asia, which enjoys the benefit of regional trade privileges. The tariffs support the Rice Competitiveness Enhancement Fund (RCEF) to the extent of P10 billion a year.
At a briefing on the Philippines’ economic performance in the first quarter, Mr. Chua said, “By removing quantitative restrictions, we are able to address both the needs of consumers for a lower retail price of rice and use the tariff revenues to fund the RCEF and provide even more assistance to farmers with excess tariff revenues.”
The RCEF is funded for six years and supports farm mechanization, seed development, propagation and promotion, credit assistance, and extension services projects.
These programs are designed to improve the productivity of rice farmers, reduce production costs, and link them to the value chain, leaving them able to compete with imports.
Tariffs in excess of the P10-billion RCEF funding requirement have been appropriated by Congress for financial aid programs for rice farmers, titling of rice lands, expanded crop insurance, and crop diversification.
“Last year, we collected P18.9 billion from rice tariff collections. We gave all that back to rice farmers. Those calling for the removal of the RTL risk taking away what we are giving to farmers to improve their productivity,” Mr. Chua said.
“Further lowering the price of rice for all Filipinos is really possible if we help farmers improve productivity. That is exactly what the RTL is doing by providing them with mechanization, seeds, and other support,” he added.
The law has been a key factor in managing inflation, Mr. Chua said.
“Prior to 2019, rice was the single biggest contributor to inflation. Today, and since the passage of RTL three years ago, it has had a negative to minimal contribution to inflation,” Mr. Chua said.
Stable supply from higher production and more imports lowered rice prices. The most recent inflation data indicate that rice inflation averaged 1.4% in the first three months of the year.
“Even during the first quarter, when rice production slightly declined, inflation of rice was below 2%. That’s because we are able to temporarily import. Importation is a way to address supply and price volatility. If we did not have that, people would have faced much higher inflation today,” Mr. Chua added. — Keisha B. Ta-asan
