Rice farmers fear losing P19-B aid
The surging rice prices forced Mr. Marcos to impose rice price caps of P41 per kilo for regular and P45/kilo for well-milled rice
Daily TribuneThe surging rice prices forced Mr. Marcos to impose rice price caps of P41 per kilo for regular and P45/kilo for well-milled rice
If the government lowers tariffs on rice imports under the Rice Tariffication Law, farmers could lose the P19-billion fund for rice production enhancement and be forced to hike prices.
The Federation of Free Farmers, through its chair Leonardo Montemayor, said a smaller government subsidy may ensue as it will lose P20 billion in revenues from the lower tariffs.
"What happens if international rice prices subside? Importers are already paying reduced tariffs due to massive under-evaluation of imports," Montemayor told DAILY TRIBUNE.
In a recent meeting with the media, Department of Finance Secretary Benjamin Diokno said the Marcos administration is already discussing reducing the tariff from the present 35 percent to zero or 10 percent.
The Rice Tariffication Law provides local farmers with at least P10 billion a year using rice import revenues to acquire farm equipment to improve their production.
Diokno said the lower tariff might help prevent another incidence of rice price hikes of up to P62 per kilo or at least 10 percent higher.
The surging rice prices forced Mr. Marcos to impose rice price caps of P41 per kilo for regular and P45/kilo for well-milled rice.
However, Montemayor said imported rice has been selling cheap already due to its massive share of 3 million metric tons annually out of the country's total supply of the food staple.
Not proportional
"Unlike palay prices, retail and wholesale prices do not respond proportionally to changes in import costs," Montemayor argued further.
The reason, he said, is that most local rice farmers are small-scale and lack the equipment to produce more at low costs, forcing them to sell palay higher to immediately recoup production expenses.
Montemayor added that the lower tariff would be applied to rice usually priced higher and preferred by higher socioeconomic classes, not the lower-income masses.
"The poor consumers will not benefit because the rice being imported is mostly of premium grades," he said.
However, Diokno assured local farmers that the reduction of rice tariff would be based on market and production data to minimize adverse effects from any economic imbalances.
"If the price movement is drastic, why would you reduce the tariff gradually? Drastic does not always mean bad, but the tariff adjustment should be data-based," Diokno said.
Diokno added the National Economic and Development Authority reviews tariff rates every six months and is tasked to guide the president on tariff adjustment for specific commodities to help control overall inflation.
