By Madelaine Miraflor
The Philippines will not stop the importation of rice despite the earlier order of President Duterte, Agriculture Secretary William Dar announced this Thursday following his meeting with the Chief Executive Wednesday night.
Twice in the span of four days, President Duterte had ordered the Department of Agriculture (DA) to stop rice importation in a bid to address the declining price of locally produced palay.
But in President’s meeting with Dar Wednesday night, it was agreed upon that the Philippine government will not move to amend or repeal the Rice Tariffication Law or Republic Act (RA) 11203.
The rice tariff law allows the unimpeded entry of imported rice into the country, which resulted in lower retail cost of rice, but continuous decline in palay prices, forcing farmers to sell their yield at a loss.
While importation of rice continues, the country’s rice output is expected to settle at its lowest level in three years by the end of this year, Dar said.
By the end of this year, the Philippines will emerge as the world’s top rice importer, beating China, with an ending stock of 4.41 million metric tons (MT) of imported rice. But that’s only if all the issued sanitary and phytosanitary (SPS) on imported rice will be used.
Dar said that to control the volume of imported rice that enters the country, the DA will instead continue to be stricter on the issuance of SPS permits on imported rice.
Local traders are only required to obtain an SPS from the DA’s Bureau of Plant Industry (BPI) in order to import rice. An SPS certifies that rice imports that will enter the country are free from pests and diseases.
“The DA, through the BPI, will strictly implement the issuance of SPS. For instance, the agency will conduct pre-inspection at the point of origin of imported rice to ensure rice quality and safety for Filipino consumers and at the same time protect the spread of crop pests and diseases,” Dar said.
Data from BPI showed that as much as 1.7 million MT of rice already entered the country since March, while there are still some rice traders who haven’t used their SPS permits.
Hoarding of imported rice and SPS permits for that matter is something that is now being investigated by the DA, said Dar.
For his part, Raul Montemayor, national manager of the Federation of Free Farmers (FFF), said that SPS regulations are “not designed or intended as a trade barrier, or a tool to control imports, although it may have that effect”.
“Stricter application of SPS measures and tighter implementation in the issuance of SPS import clearances [SPSIC] will provide only temporary relief against the uncontrolled inflow of imports,” Montemayor said.
“Once the importers are able to secure the proper clearances and documents… by the next harvest season, it will be difficult for the DA to control imports through SPSICs anymore, and continuing to withhold its issuance may subject the DA to suits from importers and complaints from exporting countries in the WTO [World Trade Organization],” he added.
Montemayor maintained that the best way to control the surge in rice imports is through the implementation of general safeguard duties, which means imposing higher tariff on rice imports.
“The legal and factual basis for doing this now is readily available, but it seems that the economic managers are dead set on not allowing this and Secretary Dar is deferring to them. In effect, the DA is prescribing the wrong medicine [which is the SPS measures). It may have some temporary effect, but it will not cure the root cause of the problem,” he added.
To protect the Philippine rice industry from sudden or extreme price fluctuations under Section 10 of RA 11203, a special safeguard duty on rice could be imposed in accordance with Safeguard Measures Act.
“The plan to raise the tariffs on rice imports is not their choice. It’s in the law. It’s a must. Section 10 of RA 11203 [Rice Tariffication Act] is not their prerogative. They have to impose it. That’s not their choice,” Philippine Chamber of Agriculture and Food, Inc. (PCAFI) president Danilo Fausto said.
Dar’s meeting with Duterte, which only lasted for 30 minutes, came days after the President made vague pronouncements on rice importation, saying he wanted it stop in order to address the plea of Filipino rice farmers who had so far lost as much as P62 billion due to the declining price of palay.
The meeting was attended by Executive Secretary Salvador Medialdea and Finance Secretary Carlos Dominguez, the head of the Duterte administration’s economic cluster.
Lowest rice output
Meanwhile, Dar said that the country’s local palay production this year will end at 18.49 million MT, which would be the country’s lowest unhusked rice output since 2016.
From 2015 to 2018, palay production in the country was highest in 2017 at 19.28 million MT and lowest in 2016 at 17.63 million MT, a data from Philippine Statistics Authority (PSA) showed.
In 2018, palay production was recorded at 19.07 million MT.
During the third quarter of this year alone, palay production was already down by 4.53 percent this quarter. This was attributed to the substantial reduction in harvested areas in Western Visayas and Soccsksargen due to insufficient water supply.
The same reason was cited for decreases in harvested areas in Calabarzon, Mimaropa Region, Central Visayas, Eastern Visayas, Zamboanga Peninsula, and Caraga.
Explaining the country’s need to continue importing rice, Dar said “we are short of 15 percent by the end of this year. We can only produce 85 percent of our rice requirements this year”.
The amount of imported rice set to enter the country by year-end will account for the 26 percent of the country’s total rice requirement.