With the Rice Tariffication Bill (Senate Bill No.

1998) recently enacted

into law by President Rodrigo Duterte, as confirmed by Presidential
Spokesperson Salvador Panelo, the rice economy and its local farmers
are expected to be affected, for better or worse, and they’re bracing for
the impact.
Here’s everything you need to know about the Rice Tariffication Law or
Republic Act 11203.
When was it signed? Duterte signed the bill into law on Feb. 15,
according to the Official Gazette, and the law will take effect on Mar. 5,
according to the Department of Finance. The law’s implementing rules
and regulations will be enacted on Mar. 3.
Why was it signed? Since October 2018, Duterte declared the issue as
“urgent” due to price hikes that caused rice to hit P70 per kilo last year.
Finance Assistant Secretary Tony Lambino predicts that the law will cut
rice prices by P7 per kilo. Bangko Sentral ng Pilipinas projects that this
will also cut inflation by 0.6 percent.
What does Duterte have to say? There is a need “to address the urgent
need to improve availability of rice in the country, to prevent artificial
rice shortage, reduce the prices of rice in the market, and curtail the
prevalence of corruption and cartel domination in the rice industry.”
What will the law do? The law essentially allows for the liberalization
of rice imports. It will remove the previously placed quota on rice
imports, permitting traders to import a near-unlimited quantity of rice.
How will it work? In the basic rules of economy, the law of supply and
demand will dictate market prices. By allowing more competitors to
enter the rice market, the law will lower the price of rice by increasing
supply.
How much are the tariffs? Thirty-five percent from the Association
of Southeast Asian Nations (ASEAN); 40 percent from non-ASEAN
countries if imports are below 350,000 metric tons; and 180 percent if
imports are from non-ASEAN countries and above 350,000 metric tons.
Where will the tariffs go? The taxes will go to a Rice Competitiveness
Enhancement Fund (RCEF), which will allocate the revenue to programs
for mass irrigation, rice storage, and research initiatives.
Who will it impact? Local farmers are expected to be impacted the
most as the removal of quantitative restrictions will pit them against
foreign competitors. The National Food Authority (NFA) will also be
directly affected as the law will remove various functions from their role
in food importation and distribution.
How will local farmers be compensated? The RCEF is expected to
allocate P10 billion annually to the support of Filipino rice farmers over
a six-year period. This will be done through the following fund
allocations: 50 percent on rice farm machinery and equipment, rice
cooperatives, and local government units; 30 percent on rice seed
development, propagation, and promotion; 10 percent on rice credit
assistance; and 10 percent to rice extension services.
Is it a good move in the long run? Technically, it will prevent price
hikes in the future as competition is a healthy component for the
economy. Senate Committee on Agriculture and Food
Chairperson Cynthia Villar concurs, “With the expiration of the
quantitative restriction on rice importation, this is a very important piece
of legislation, which will help our farmers improve their profitability and
competitiveness.”
Also in favor of competition, Panelo insists the liberalization of the rice
market will promote production. “Well, ‘pag ni-liberalize mo naman eh
magkakaroon ng competition in the market. So magpapababaan sila ng
presyo, otherwise hindi sila mabibili, hindi ba? Kaya nga—law of
supply and demand iyan eh,” he said.
What do the farmers have to say? Kilusan ng Magbubukid ng
Pilipinas considers the law as a “death warrant” to the local rice industry
as it would open the floodgates to foreign industries that would
overpower or “wipe out” local rice farmers. KMP estimates
that 500,000 of a total of 2.4 million rice farmers will be negatively
impacted by the law. The organization states that only through investing
and boosting local production will the Philippines achieve stable rice
prices and supply.
What does NFA have to say? With restrictions removed, NFA will lose
its power and functions in rice importation. Their role will now be
limited to maintaining a buffer stock of rice for emergency situations.
They will not be permitted to manage the licensing of importers and
traders. Some 400 NFA employees are expected to be laid off as the law
will also move NFA under the Department of Agriculture.
What does this mean for the agriculture industry now? Now that it
has been rendered a law, expect the aftermath of its implementation to
come in the following months. Local farmers will be affected by the
introduction of more foreign competitors and how they fare in the face
of that competition will depend on the RCEF that the law has put into
place.
Subscribe to our weekly newsletter to receive all the tools and solutions
entrepreneurs need to stay updated on the latest news in the industry
TAGS :

http://fnbreport.ph/features/agriculture/the-rice-tariffication-law-explained-anrii-
IMAGE Pixabay

In light of recent events, one that has seen an uproar from Filipinos, concerns the Nueva
Ecija farmers selling their harvested rice for the measly amount of P7 per kilo. This is
connected to the Rice Tariffication Law.

What is the Rice Tariffication Law (RTL)

It was in February 2019 that the Rice Tariffication Law, "An Act liberalizing the
importation, exportation, and trading of rice, lifting for the purpose the quantitative
import restriction on rice," was signed into law by President Rodrigo Duterte. The
RTL focuses on having rice importers pay a tariff. Southeast Asian countries will pay a
35% tariff, while non-ASEAN members pay a 50% tariff or the tariff dictated by the
World Trade Organization.
These efforts that focus on rice importation aim to make rice more accessible to Filipinos,
as rice from countries like Vietnam and Thailand are sold at a more affordable price. But
what happens to Filipino rice farmers? Are there safety nets for our farmers?
ADVERTISEMENT - CONTINUE READING BELOW

ADVERTISING

How It Affects Farmers

One of the main issues concerning the RTL is that Filipino rice farmers are having, and
may continue to have, a hard time competing with imports that come with a cheaper price
tag.
According to the RTL, farmers should be protected by the Rice Competitiveness
Enhancement Fund (RCEF). The annual amount of P10 billion from this program
should address the income increase of Filipino farmers and funding the farmers with
assistance. The assistance can range from the development of inbred rice seeds, rice farm
equipment, and skills enhancement.
Given the ongoing battle of rice farmers who should be benefitting from the Rice
Competitiveness Enhancement, the farmers claim that they do not feel that they are being
helped out by the government. In a report by ABS-CBN News, the Kilusang Magbubukid
ng Pilipinas (KMP) says that only the registered cooperatives of the government are the
only ones benefitting from the RCEF, and that only 150 cooperatives out of the 2.7
million rice farmers are registered. Narcing Manalad, one of the farmers, even says,
"Saan sasapat 'yang P15,000 na 'yan? Samantalang 'yong puhunan mo lang sa
pagsasaka ay dito pa lang sa mga input,
QUEZON PROVINCE, Philippines – “Napakahirap sa lahat, ang matulog nang
gutom (The hardest of all is to sleep hungry).”

Rice farmer and fisherman Rolando Merto, 57, still remembers November 2004, when
flash floods and mudslides swept through Infanta, Quezon Province. His village,
Barangay Bubuin, was one of the many communities that suffered from the disaster
triggered by a typhoon, along with those in Real and General Nakar, also in Quezon.

For farmers like him who rely on subsistence agriculture to feed families and for income,
the loss was severe, and even traumatic.

Communities saw bodies on the shore or buried in the mud, or dogs underneath cut
logs and uprooted trees. The fallen trees, locals say, were the consequence of
widespread illegal logging in the province.

Plantations were ruined and some locals had to rely on fishing, which was also difficult
due to weather conditions. Others ended up borrowing money from neighbors. Some
locals would agree it was the worst disaster the province has experienced in years, that
not even calamities brought about by more recent typhoons could compete.

Food insecurity
Merto said that during the days of the calamity, they did not have enough to eat. His
family no longer had enough bigas or rice grains. They had to ration their meals. Relief
efforts could not reach their area immediately, blocked by the flash floods, mudslides
and heavy rain. Some aid eventually arrived but locals said it had to be transported
across the sea. Many parts of the land area were uncultivated for a long time.

The time came when rice from the National Food Authority (NFA) was already being
sold in town, after relief goods had already run out after a month’s distribution. Merto
asked his son to buy a kilo. But when they cooked the rice, he said the rice smelled so
bad, he could not eat it.

He believes the NFA rice bags were kept in storage for so long (to reserve them for
calamities) it had gone stale. He said he tried to eat it, but he couldn’t. Hunger and
frustration brought tears to his eyes. He ended up just eating fish and the soup that
came with it. He still went to sleep with an unfilled stomach.

How It Affects Consumers

Consumers will be affected because the Rice Tariffication Law also concerns inflation
rates. RTL implies that the rice sold in markets should be priced lower to become more
affordable and accessible to all Filipinos.
Even if, let's say, the RTL is still in its early stages, we should always be wary of how
much money we are actually spending on rice. The Philippine Statistics Authority shows
that regular milled rice should retail for P38.4 per kilo while well-milled rice cost P43.5
per kilo as of the second week of August 2019. According to Rappler, "On average,
farmers sell palay for a little over P17 per kilo, much lower than the P22 last year."
This should raise questions: Even if local rice farmers are already selling their harvest
at a low cost, why do market prices not reflect these concerns? Why are you paying
for twice, sometimes thrice, as much for a kilo of rice?
https://www.yummy.ph/news-trends/rice-tariffication-law-effects-a00260-20190906

IMAGE Pixabay

In light of recent events, one that has seen an uproar from Filipinos, concerns the Nueva
Ecija farmers selling their harvested rice for the measly amount of P7 per kilo. This is
connected to the Rice Tariffication Law.
What is the Rice Tariffication Law (RTL)
It was in February 2019 that the Rice Tariffication Law, "An Act liberalizing the
importation, exportation, and trading of rice, lifting for the purpose the quantitative
import restriction on rice," was signed into law by President Rodrigo Duterte. The
RTL focuses on having rice importers pay a tariff. Southeast Asian countries will pay a
35% tariff, while non-ASEAN members pay a 50% tariff or the tariff dictated by the
World Trade Organization.
These efforts that focus on rice importation aim to make rice more accessible to Filipinos,
as rice from countries like Vietnam and Thailand are sold at a more affordable price. But
what happens to Filipino rice farmers? Are there safety nets for our farmers?
ADVERTISEMENT - CONTINUE READING BELOW

How It Affects Farmers

One of the main issues concerning the RTL is that Filipino rice farmers are having, and
may continue to have, a hard time competing with imports that come with a cheaper price
tag.
According to the RTL, farmers should be protected by the Rice Competitiveness
Enhancement Fund (RCEF). The annual amount of P10 billion from this program
should address the income increase of Filipino farmers and funding the farmers with
assistance. The assistance can range from the development of inbred rice seeds, rice farm
equipment, and skills enhancement.
Given the ongoing battle of rice farmers who should be benefitting from the Rice
Competitiveness Enhancement, the farmers claim that they do not feel that they are being
helped out by the government. In a report by ABS-CBN News, the Kilusang Magbubukid
ng Pilipinas (KMP) says that only the registered cooperatives of the government are the
only ones benefitting from the RCEF, and that only 150 cooperatives out of the 2.7
million rice farmers are registered. Narcing Manalad, one of the farmers, even says,
"Saan sasapat 'yang P15,000 na 'yan? Samantalang 'yong puhunan mo lang sa
pagsasaka ay dito pa lang sa mga input, halos P10,000 plus na."
ADVERTISEMENT - CONTINUE READING BELOW

How It Affects Consumers

Consumers will be affected because the Rice Tariffication Law also concerns inflation
rates. RTL implies that the rice sold in markets should be priced lower to become more
affordable and accessible to all Filipinos.
Even if, let's say, the RTL is still in its early stages, we should always be wary of how
much money we are actually spending on rice. The Philippine Statistics Authority shows
that regular milled rice should retail for P38.4 per kilo while well-milled rice cost P43.5
per kilo as of the second week of August 2019. According to Rappler, "On average,
farmers sell palay for a little over P17 per kilo, much lower than the P22 last year."
This should raise questions: Even if local rice farmers are already selling their harvest
at a low cost, why do market prices not reflect these concerns? Why are you paying
for twice, sometimes thrice, as much for a kilo of rice?
ADVERTISEMENT - CONTINUE READING BELOW

This Is How We Can Help Our Local Farmers!

JUN 29, 2019

What can you do?

What can we do as advocates who want to help our local farmers? We buy from local
farmers! You can mostly find these in local markets and specialty stores whose goal is to
help our local producers. There are the likes of Session Groceries, an online grocery that
sells produce from Baguio, or Cropital, which is a crowdfunding platform that connects
anyone to help finance our farmers.
Jam Melchor, the founder of Philippine Culinary Heritage Movement and the country head
of Slow Food Youth Network Philippines, also offers a solution for the farmers. He says,
"And for farmers to learn how to slowly plant other crops so they are protected when one
cash crop is at a low price or no harvest"
Even though the Rice Tariffication Law is still in its seventh month and may still be
experiencing birthing pains, we should remain vigilant with what is happening to our
agriculture landscape. We should help each other by keeping ourselves informed about
our resources and the livelihood of our kababayan.
https://www.yummy.ph/news-trends/rice-tariffication-law-effects-a00260-20190906
Rice consumers in Metro Manila in 2017 paid on average 41% more than the
landed price of rice imported freely from Vietnam or Thailand. But our rice
farmers sold their rice at only 9% above this free trade price. The difference or
32% went to rice traders, millers, and/or simply lost to market inefficiencies in
the rice value chain.

NFA and trade restrictions, especially in rice distribution, “displace private

transportation, storage, and handling, rendering marketing less competitive
and efficient” (Jandoc and Roumasset 2018).

A compelling argument why President Duterte should sign this bill into law is
that in doing so he kicks off the process of substantially reducing the
inefficiencies and collusion in the rice market system, which for nearly half a
century had made rice farmers poor. Farmers become better off as they
capture more of the intended trade protection of the law from rice traders in
collusion with corrupt NFA agents.
If farmers obtained 10% NPR in 2017, rice tarrification coupled with
investments in infrastructure under the government’s Build, Build, Build
program, could potentially raise NPR from 10% to 35%.

The tariff rate on imported rice could be lowered in the future without harming
the vast majority of farmers. The current proposed tariff level of 35% is a
maximum rate. If it is lowered, most of the rice farmers who are rice
consumers during most part of the year can be made better off, along with
non-rice farmers in rural areas, fisherfolk, workers and residents in urban
areas.

References
Jandoc, K. and Roummaset, J. 2018. Rice Tariffication and its Role in
Reducing Rice Prices. Unpublished paper.

Dawe, D., P. Moya, C.Casiwan and J. Cabling. 2008. “Rice Marketing

systems in the Philippines and Thailand: Do large numbers of competitive
traders ensure good performance?” Food Policy 33(5): 455-463

Mataia, A., J. Beltran, R. Manalili, B. Catudan, N. Francisco and A. Flores.

2018. Rice Value Chain Analysis in the Philippines. Muñoz City, Philippines:
Philippine Rice Research Institute.