Higher rice tariff rate urged

The additional safeguards will also save the government from rolling out conditional cash transfer and loan assistance to farmers.

Agricultural Fisheries Alliance (AFA) chairman Ernesto Ordoñez said imported rice should be at least equal to the local market price.

The Philippine Chamber of Agriculture and Food Inc. (PCAFI) on Wednesday said the country’s rice tariff rate should be raised to 70 percent to give local farmers a “temporary yet extra edge against imports.”

“A rice tariff of at least 70 percent, as sanctioned by the Rice Tariffication Law’s (RTL) safeguards provision, was pressed to be urgently implemented by the government to arrest further imports hitting beyond all-time high records, saving Filipino farmers,” PCAFI president Danilo Fausto said.

According to Fausto, the additional safeguards will also save the government from rolling out conditional cash transfer and loan assistance to farmers, which the Department of Agriculture (DA) is currently doing to spare farmers from “serious damage.”

“DA should immediately implement it as promised. It should be by 1 October,” Fausto noted.

He stressed, however, that tariff protection under safeguards would be a temporary and transitory policy.

Under Republic Act 880 or the Safeguard Measures Act, safeguards may be imposed once there was significant idling of productive facilities in the domestic industry; the inability of a significant number of firms to carry out domestic production at a profit; and significant unemployment or underemployment within the domestic industry.

All of these conditions, according to Fausto, were reported to have been happening following RTL implementation this year.

Meanwhile, PCAFI trustee and Agricultural Fisheries Alliance (AFA) chairman Ernesto Ordoñez said the imposition of higher safeguards from the current 35 percent level is “urgent even as there are trade notification rules involved.”

“We do not want a repeat of the mistake during the 1990s when we agreed to rapid tariff reduction without giving the farmers the necessary support services and the WTO-approved safeguard measures,” Ordoñez said.

Citing the results of a survey conducted by the DA, Ordoñez said the 35 percent tariff rate on imported rice has sent farmgate prices of wet palay or unhusked rice in Cagayan Valley, Central Luzon and Davao plunging to P12.10 per kilogram. This is barely above the P12 per kilogram production cost.

According to PCAFI’s monitoring, imported rice is currently being traded at around P17 per kilo. With the overhead of traders, it swells to P20 per kilo, and further up to P28 per kilo in the retail market when logistical costs are put into the equation.

“Imported rice should be at least equal to the local market price. That will make them lose over domestic rice. Now, NFA should ensure farmers dictate the buying price of palay at P17 per kilo for dry and P13 to P14 per kilo for wet,” the chamber said.

Now at 2.5 million metric tons (MT), rice imports are projected to hit 2.6 million MT by end-2019.