Review of rice tariff law sought as palay prices plummet

An industry group has urged Congress to review the rice tariffication law (RTL) as palay prices continued to drop and are expected to worsen when harvests reach their peak this month and in November.

According to the Federation of Free Farmers (FFF), the rice policy must make it mandatory for the Department of Agriculture to make use of the safeguard provision under the World Trade Organization (WTO) and local laws. This will allow the government to impose additional taxes on imported rice whenever they would be proven to hurt local farmers. Additional taxes are expected to discourage importation of the staple.

The group also recommended an amendment to the law that would permit the temporary reinstatement of a cap on imports under certain conditions, which was allowed by the WTO.

The drastic slide in palay prices to P12 a kilo from P20 a kilo earlier this year was blamed on the overwhelming volume of imports that came in due to the surge in the demand for rice as people went into panic buying during the height of the quarantine restrictions.

Imported rice comes cheaper than local rice, making it hard for Filipino farmers to compete. With the cost of production still at an average of P12 per kilo, palay growers are left with little to no income, sometimes they even incur losses.

Rice prices, however, have not gone down at the same rate as that of palay prices. Data from the Philippine Statistics Authority showed that the average rice price in the market for regular-milled rice was P35 a kilo.

“[Lawmakers] have a moral responsibility to promptly rectify any deficiency, or omission in the law before these bring more harm to our farmers,” said FFF national chair Raul Montemayor. “They also need to address indications that the benefits of rice trade liberalization have been captured mostly by market intermediaries, while consumers have not benefited significantly from cheaper rice.”

Despite the interventions committed under the rice competitiveness enhancement program, FFF said its implementation had been delayed by the law itself.

“These delays are due to RTL, which mandated research agencies like PhilRice and PhilMech to directly implement multibillion programs all over the country … Also, the RTL restricted the use of the funds to certain programs even if these do not address the priority needs of farmers in specific areas,” the group said.