In addressing the continuous decline in palay prices, the Federation of Free Farmers (FFF) is asking the government to follow the Rice Tariffication Law (RTL) and impose safeguard duties on rice imports instead of resorting to decisions such as the proposed suspension on the issuance of sanitary and phytosanitary import clearances (SPS-ICs) on rice.
In a statement, FFF expressed dismay and urged caution over “likely illegal proposals” made by some Senators to address urgent concerns of rice farmers.
For instance, Senator Cynthia Villar, chairperson of the senate agriculture committee, asked the DA on Thursday to stop issuing SPS-ICs to rice importers during harvest time.
Villar is the principal sponsor of RTL, which allowed unlimited rice importation in the Philippines and removed all forms of quantitative restrictions on rice imports.
Under such law, withholding of SPS-ICs is only allowed if there is a risk that imported rice will infest local crops or harm consumers.
This is why FFF proposed that instead of doing this, the government should just follow the provisions in the RTL, specifically the one that allows the imposition of safeguard measures.
Under the Section 10 of RTL, in order to protect the Philippine rice industry from sudden or extreme price fluctuations, a special safeguard duty on rice shall be imposed in accordance with Safeguard Measures Act.
Safeguard Measures Act, on the other hand, allows additional safeguard duties on top of regular tariffs in case an import surge is shown to be harmful to local farmers.
“Suspending SPSICs during harvest time does not only negate the intent of Section 3 of the RTL. It also contravenes Section 4, which provides that the SPS clearance should not impose any import volume or timing restrictions,” said FFF National Manager Raul Montemayor.
He further pointed out that Villar’s proposal could subject the country to complaints from exporting countries before the World Trade Organization (WTO).
Likewise, private importers could file cases against the government for unduly restricting imports in violation of the RTL.
“Safeguard duties are the only legal way to manage imports under the RTL and WTO rules. Yet, several Senators want to skirt these rules and stop imports during harvest time by withholding the issuance of SPSICs. We can actually achieve the same result by imposing a safeguard duty that is high enough to temporarily discourage imports. We cannot understand why the DA insists this is inflationary, whereas suspending SPS-IC issuance is not,” said Montemayor.
The FFF then urged Villar to keep an open mind on possible amendments to the RTL so that the government can effectively respond to market disturbances without resorting to potentially illegal measures.
During the fourth week of September, the average farmgate price of palay went down further to P16.26 per kilogram (/kg), falling by 3.4 percent from its level of P16.84/kg in the previous week, data from the Philippine Statistics Authority (PSA) showed.
The same data specified that in during the period, provinces like Surigao del Sur, Davao, North Cotabato, and Quezon province saw palay prices dropping to as low as P12/kg to P13.92/kg, which means some farmers in these areas had zero to significantly low earnings during this harvest.