Rice Tariffication Law will help keep prices down

Published February 20, 2019, 12:11 AM

by Charissa Luci-Atienza & Bernie Cahiles-Magkilat

E CARTOON FEB 20, 2019In the frenzied effort to find ways to stop the fast-rising market prices last year,  government economists  found one way that  quickly helped. They called for the immediate importation of  250,000 metric tons of rice  from Vietnam and Thailand to pull down rice prices in our markets. The move succeeded, for rice is the key element in Filipino consumers’ market expenses. The  report  of  massive rice imports pulled down  rice prices and this in turn pulled down market prices in general.

This is the reason for the Rice Tariffication  Bill  which President  Duterte signed into  law  last Friday. Previous to  the  enactment of the law, the amounts of rice imports were strictly controlled so as to protect Filipino rice farmers. Rice imports just had to pay a duty  of  25 percent if from  an ASEAN state and 50 percent if from a non-bloc member.

With the  Rice  Tariffication  Law, there are no longer any limits on the quantity of importations. But additional tariffs are imposed – 35 percent  if  from an ASEAN state, 50 percent if  from a non-bloc member. We  can  now expect  big supplies of low-priced imported rice in  our markets.

That  should solve the problem of high prices – or inflation – which we had last year. It takes care of  the nation’s  consumers. Big imports will boost supply which, in turn, will mean lower prices, under the law of supply and demand.

But   it  will  set back our rice farmers who will not be able  to sell  their produce in our markets because  they cost more than the imported rice. Our farmers have not been able to bring down their production costs,  as their fellow farmers in Vietnam and Thailand.

This will now be the next  project  of  the Duterte administration,  Secretary Benjamin Diokno of the Department of Budget and Management said last week.  Agriculture should be at the core of our national development  program  but  it has not been able to make its proper contribution to national development.  In 2018, services accounted for 56.22 percent of the national growth; industry, 34.8 percent; and agriculture, only 8.94 percent.

But  for  now, let us welcome  the  Rice Tariffication Law which President Duterte signed last Friday. It may  initially  hurt  our  rice farmers but it  should  challenge them to do better to match  the production capabalities  of  their fellow farmers in Vietnam and Thailand.

The Rice Tariffication  Law should  avert a recurrence of our difficulties last year when  inflation rates soared to new heights  —  to 4.5 percent in May, to 5.7 percent in  July, to 6.4 percent in August, to 6.7 percent  in Septem                                                                                                                                                                                                                                                                        ber.  It is now down to 4.4 percent. Let us keep it  that  way.