Local farmers to benefit from rice tariffication law — Cynthia Villar

Published September 17, 2018, 8:02 PM

by Roel Tibay

By Vanne Elaine Terrazola

Sen. Cynthia Villar has assured that local farmers would benefit and would be protected under the Senate’s bill liberalizing the importation of rice in the country.

The chairwoman of the Senate Committee on Agriculture and Food made the assurance Monday as she sponsored Senate Bill 1998, or the proposed rice tariffication law, for plenary debates.

Senator Cynthia Villar (Senate of the Philippines / MANILA BULLETIN)
Senator Cynthia Villar
(Senate of the Philippines / MANILA BULLETIN)

Senate Bill 1998 seeks to replace the quantitative restriction (QR) on rice imports with tariffs and lifts the quantitative exports restrictions on rice. It amends Republic Act 8178 or the Agricultural Tariffication Act.

The measure was certified as urgent by President Duterte as economic managers claimed that liberalizing rice imports would reduce the retail price of rice by P4 to P7 per kilo and reduce inflation rate by 0.4 percentage points.

Under the bill, a 35-percent duty will be imposed on imports coming from Association of Southeast Asian Nations (ASEAN) member-states and 50 percent for non-ASEAN member-states.

But in her sponsorship speech, Villar said the Senate’s version of the priority measure will not only help reduce rice prices but at the same time provide enough support for local farmers who would be affected by the entry of cheaper rice from other countries.

Noting that the lifting of QR on rice will put local farmers at a disadvantage, Villar said measures would be in place to protect the local rice industry and improve its productivity and competitiveness.

“I will not agree with the liberalization of importation without helping our farmers because we will lose. We are lagging behind Vietnam and Thailand in terms of competitiveness. So we have to help our farmers to be competitive as soon as possible. That’s why we need additional funds and programs to help our farmers mechanize and ultimately lower the cost of producing palay,” she said.

A key feature of the bill, Villar said, is the proposed creation of the Rice Competitiveness Enhancement Fund (RCEF) or the rice fund consisting of an annual appropriation of P10 billion under the national budget.

Villar said the appropriation will be sourced from the General Appropriations Act until such time that there is enough tariff revenue to cover the fund.

She said the tariff revenues are estimated to reach P8 billion a year.

To ensure proper disbursement of the fund, the RCEF will be allocated and distributed to rice-producing sectors, as follows:

· Fifty percent shall be used as grant-in-kind to eligible farmers’ associations and registered rice cooperatives and local government units, in the form of rice farm equipment such as tillers, tractors, seeders, threshers, rice planters, harvesters, irrigation pumps, small solar irrigation, reapers, driers, millers, and the like, to improve farm mechanization. This will be implemented by the Philippine Center for Postharvest Development and Mechanization (PhilMech).

· Thirty percent, meanwhile, shall be used for the development, propagation and promotion of inbred rice seeds to rice farmers, and the organization of rice farmers into seed growers associations and/or cooperatives. Villar said this is to engage them in seed production and help them sell improved seed varieties. The Philippine Rice Research Institute (PhilRice) shall be designated to implement this provision.

· Ten percent, also, shall be made available to rice farmers and cooperatives in the form of credit with minimal interest. The Land Bank and the Development Bank of the Philippines shall manage the loans.

· Lastly, 10 percent will be used for extension services divided between PhilMech, PhilRice, Agricultural Training Institute (ATI) and the Technical Education and Skills Development Authority to teach farmers on rice crop production, modern rice farming techniques, seed production, farm mechanization, and knowledge or technology transfer through farm schools nationwide.

Villar said farmers, farm workers and their dependents who are listed in the Registry System for Basic Sectors in Agriculture would be prioritized to benefit from the rice fund.

Aside from the RCEF, the bill would also mandate the Department of Agriculture and other concerned agencies to come up with a Rice Industry Roadmap to restructure government’s delivery of support services for the agricultural rice sector.

The proposed rice tariffication law is expected to remove unnecessary government intervention in the rice market.

If passed, the National Food Authority (NFA) shall no longer establish rules and regulations governing the importation of rice and issue import licenses or permits for the private sector. Likewise, the power of the NFA to first certify the existence of a shortage, before importation is allowed, would also be removed.

“Once the QR is replaced by predictable tariffs, the private sector can respond more efficiently to the market. And the government can focus on regulating to ensure food safety and fair market competition,” Villar said.