Proposed rice tariff cut a stab in the back of Philippine farmers

The Federation of Free Farmers (FFF) believes the recommendation of the Department of Agriculture (DA) to reduce tariff on imported rice was unwarranted and ill-timed.

Last Jan. 28, the DA asked the Tariff Commission (TC) to reduce tariffs on rice imported from non-Asean countries to only 35 percent from the current 50 percent. The TC will conduct a hearing on Feb. 4 to discuss the proposal.

The FFF questions the basis for the DA petition to the commission mainly because Agriculture Secretary William Dar had repeatedly attested to an ample supply of rice in the Philippines following a record harvest in 2020 that defied a series of typhoons and natural calamities. The group also took note of a move by the DA to suspend the issuance of import clearances late in 2020 to ease a glut in supply resulting from a surge in importation in the middle of the year.

If prices would be the justification, data from the Philippine Statistics Authority (PSA) would show that reducing tariff on imported rice would not be a rational move.

PSA data showed that average retail prices for well-milled rice (WMR) and regular-milled rice (RMR) in 2020 were 2.5 percent lower than their 2019 levels. From July 2020, prices had shown a continuing downtrend an reached their lowest level of P40.75 per kilo for WMR and P36.09 per kilo for RMR in December 2020. Local prices of rice declined despite an increase in prices of rice from other countries, especially Vietnam and Thailand, which are major sources of rice imported by the Philippines.

This sudden proposal of the DA is totally unjustified. It is a stab in the back of our rice farmers, who are still reeling from the drastic fall in farm gate prices caused by excessive imports in the last two years following the enactment of the Rice Tariffication Act. Why encourage more and cheaper imports now when local supply is more than enough and prices are very stable?

Imports from countries, like India and Pakistan, are still cheaper than comparable products from Asean countries, like Vietnam and Thailand, even if they were assessed a higher 50 percent tariff. There is no guarantee that reduced import costs for rice from non-Asean countries due to lower tariffs will translate into lower retail prices for consumers.

The DA proposal will only make importers richer. Those who will now import from India and Pakistan to take advantage of lower prices and tariff are also the ones who import from Thailand and Vietnam. They will sell the rice at the highest possible price and consumers are not likely to benefit from their savings.

The DA proposal to reduce rice tariffs was made with zero consultation with farmers and appears to have been surreptitiously inserted into the petition to reduce tariffs for pork products.

Secretary Dar should live up to his mandate to support the Philippine agricultural sector and small farmers, instead of pandering to the interests of importers under the guise of protecting consumers.

It is lamentable that our own agriculture secretary is bringing harm to the very farmers he is supposed to protect and support.

(Editor’s note: Raul Montemayor is national manager of the group Federation of Free Farmers)