Senate OKs rice tariffication bill

Published November 14, 2018, 6:27 PM

by Roel Tibay

By Vanne Elaine Terrazola and Genalyn Kabiling

The Senate has approved on third and final reading Wednesday night the bill that would liberalize the importation of rice into the country with the imposition of tariffs.

The Joint Session of the Senate and the House of Representatives on the extension of Martial Law in Mindanao commences in the Plenary of the Batasang Pambansa on December 13, 2017. (ALVIN KASIBAN / MANILA BULLETIN)

Malacañang expressed optimism that once enacted into law, the rice tariffication bill will help ensure stable supply, lower prices, and fight the cartel in the rice industry.

Voting 14-0, the Upper Chamber passed Senate Bill No. 1998, which seeks to replace the quantitative restrictions (QR) on rice imports with tariff and hence, will remove unnecessary government intervention on rice market. The bill also moves to remove the QR on rice exports.

The bill, amending the Agricultural Tariffication Act of 1996, is expected to address the rising rice prices in the country.

The measure, certified as urgent by President Duterte,also proposes the abolition of the National Food Authority (NFA) Council and would open importation to private rice traders.

Senator Cynthia Villar, chair of the Senate Committee on Agriculture and sponsor of the SB 1998 during the plenary debates Wednesday, said the NFA would no longer be allowed to import rice and instead be mandated to buy rice supply from local farmers who would be affected by the removal of the QR on rice imports.

Villar said the bill would “clip” the authority of the NFA over rice imports after it failed in its mandate of maintaining affordable rice supply and triggered the hike in rice prices in previous months.

Under the SB 1998, 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.

Government economic managers had earlier said 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.

The Agriculture department also said that the bill is expected to bring in at least P20 billion every year to the agriculture sector.

Another key feature of the bill is the proposed Rice Competitiveness Enhancement Fund (RCEF) wherein at least P10 billion will be allocated annually for the local rice industry.
Senators had earlier agreed with the amendment pushed by Senate President Pro Tempore Ralph Recto to appropriate the revenues from the collected tariffs to farmers who will be affected by the liberalization of the rice importation.

The RCEF shall amount to a minimum P10 billion a year for six years, and tariff revenues in excess of P10 billion shall be appropriated by Congress based on the programs in the proposed rice tariffication law, including financial assistance to distressed rice farmers.

The RCEF will be allocated and distributed to rice producing sectors, as follows:

1. 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 Post-Harvest Development and Mechanization (PhilMech).

2. Thirty percent 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 will 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.

3. Ten percent 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.

4. 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.

Meanwhile, Presidential spokesman Salvador Panelo thanked the Senate for passing the administration bill that seeks to replace the import restrictions on rice with a tariff system.

“The Palace expresses its gratitude to the Senate for passing on third and final reading the Rice Tariffication Bill,”Panelo said in a statement.

“The President has certified the aforesaid bill as urgent. In his communication with the leadership of the Senate, the President expressed the urgent need to improve the 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,” he added.

The House of Representatives approved its version of the bill easing rice importation last August.

“We remain optimistic that the bill would also run smoothly during the bicameral conference committee deliberations by both Houses of Congress,”Panelo said.

“We are likewise confident that through the enactment of this bill into law, we would be able to protect the rice industry from sudden price fluctuations and eventually ease the burden of the Filipino consumers from soaring prices,” he added.