Liberalized rice trade to stay, says official
FINANCE Secretary Carlos Dominguez has said the government, under President Duterte’s decisive leadership, has finally broken the “stranglehold of inefficiency” in the domestic rice industry with the passage of the Rice Tariffication Law (RTL) that aims to “revolutionize” the agriculture sector and slash the retail cost of the staple for the benefit of over 100 million Filipino consumers.
This law, which has liberalized imports of the grain, will be fully implemented by the Duterte administration as it pursues measures to stamp out smuggling and hoarding by unscrupulous traders to cushion the impact on both palay growers and rice consumers of the temporary “transition challenges” arising from the newly deregulated market, Dominguez said.
He said the government is also carrying out a slew of measures to come to the aid of farmers affected by falling palay farmgate prices, including the grant of interest-free, easy-to-pay loans and unconditional cash transfers (UCTs) to rice growers.
“We are confident that these transition challenges are temporary. Nevertheless, the government is responding to them with decisiveness. There is no inclination to repeal, revise or suspend the Rice Tariffication Law. We are confident that this is the best means to move our agriculture forward and foster competitiveness,” Dominguez said at the 11th World Rice Conference held Wednesday at the Makati Shangri-La Hotel in Makati City.
The RTL or Republic Act (RA) No. 11203, has removed the quantitative restrictions (QRs) on rice trading and imposed a minimum 35 percent tariff on imports of the grain.
Under this law, tariff collections from rice imports will go to the Rice Competitiveness Enhancement Fund (RCEF), which
will get P10 billion yearly to finance the long-overdue modernization of this rural sector by providing farmers with wider access to credit, agricultural training and extension work; and fresh funds for mechanization, high-quality seeds, fertilizers and other forms of assistance.
An Agriculture Secretary during the former Corazon Aquino administration, Dominguez pointed out that in only seven months since it was implemented, the RTL has netted tariff revenue of P11.4 billion, which is already beyond the P10 billion earmarked per year for RCEF.
With over P11 billion in import tariffs this early, the government “has ample means to do even more to make our agricultural production more efficient,” Dominguez said.
Rice tariffication, Dominguez said, should be viewed as an “opportunity to revolutionize the agriculture sector and help farmers become more competitive in the global economy.”
“We are now reaping only the initial harvest of the Rice Tariffication Law. The Duterte administration is determined to bring this historic reform measure to full fruition,” Dominguez said.
He said that in slashing market prices by about P8 per kilo since the lifting of the QRs on rice imports last March, RA 11203 has significantly reduced inflation, which, in turn, has boosted household spending that helped drive GDP growth to 6.2 percent in the July-September period.
Short-term “transition challenges,” such as the drop in palay farmgate prices in several areas, are being decisively addressed by the Duterte administration through several measures, Dominguez said.
Among them is the implementation by the Department of Agriculture (DA) of the Survival and Recovery or SURE-aid program, which offers affected farmers a P15,000 interest-free loan each, payable over eight years.
The DA is also working on the procurement of palay above production costs by local government units (LGUs), along with the provision of bank loan programs to enable these LGUs to buy this season’s harvest from growers in their respective localities, Dominguez said.
He said the Executive Department is likewise closely engaging with the Congress to ensure the approval of a UCT program for affected farmers and the distribution of rice, in lieu of giving cash as rice subsidy, to beneficiaries of the Pantawid Pamilyang Pilipino Program (4Ps) of the Department of Social Welfare and Development (DSWD).
On the part of the Department of Finance (DOF), Dominguez said both the Bureaus of Internal Revenue (BIR) and of Customs (BOC) have formed strike teams to run after possible smuggling, hoarding and non-compliance with tax and business regulations by unscrupulous traders.
He recalled that last Oct. 3, the BIR uncovered unregistered warehouses in Bulacan and discovered more than 250,000 sacks of imported rice from Vietnam and Myanmar, among other commodities. The companies involved have failed to produce legitimate import documents on their rice stockpiles up to now.
“Over the next months, expect to see anti-smuggling and anti-hoarding activities to intensify as the DA and the Philippine Competition Commission (PCC) investigate possible collusion to undermine the market. President Duterte has issued clear instructions to unmask and prosecute those involved in economic sabotage and bring them to justice,” Dominguez said.
He made it clear that the Duterte administration will never return to the pre-rice tariffication period of unstable rice supplies, high retail prices, profiteering and low farm productivity.
“This is not the future of our agriculture. We should let the Rice Tariffication Law do its work and give the economy time to adjust for further easing of rice prices for all Filipinos and for support programs to lower the production costs of our farmers,” Dominguez said.
Dominguez said Filipino farmers can be as productive as those in Vietnam and Thailand if provided with the right kind of support, which will now be provided to them through the RCEF.
“The Rice Tariffication Law will redound to the benefit of the Filipino people and our rice farmers. We will continue to do what is necessary to make rice available and affordable for all while making the country’s rice sector viable, efficient and globally competitive,” he added.