Rice imports frozen

Now what I said if its harvest time, don’t import since rice harvest is seasonal.

Rice tarification has helped stock up warehouses of both government and private sectors of reasonably priced goods but the backlash is on ordinary farmers who suffer depressed prices of their produce. ANALY LABOR @tribunephl_ana

President Rodrigo Duterte appears caught between stemming corruption in the local rice industry, which is among the goals of the Rice Tariffication Law (RTL), and in protecting the welfare of local farmers who are being drowned by the deluge of imported grains that triggered his order to Agriculture Secretary William Dar to suspend rice importation.

In a press briefing in Malacañang Tuesday night, the Chief Executive said he has ordered the suspension of the importation of rice as it is already harvest season. “Yes. Because it is harvest time,” the President said.

In a radio interview, Federation of Free Farmers chairman Leonardo Montemayor came up with losses estimated at P140 billion among local farmers from cheap imports.

“That is equivalent to more than the agricultural damage from super typhoon ‘Yolanda,’” Montemayor said.

Socioeconomic Planning Secretary Ernesto Pernia who opposed the suspension of the rice importation has proposed cash assistance to help farmers weather the effects of the influx of imports.

Montemayor, however, considered the subsidies, which total P3 billion or P5,000 to each farmer for the entire year, as too small compared to their actual losses.

“The government will even make it appear that it would be a Christmas gift from the government, which means that farmers will even have a debt of gratitude as a result,” the head of the farmers’ group said.

President Rodrigo Duterte’s order to suspend importations during the harvest period will help hard up farmers. MALACAÑANG PHOTO

“Now what I said if its harvest time, don’t (import) since it’s seasonal. The problem is that we can’t truly rely on the producers. They will say they can plant. If we can harvest it, we can fill up two-thirds or one-third of the requirements,” the President noted.

“But you don’t know the situation in the world especially with climate change now if what you planted will reach harvest time or be destroyed by a storm,” he added.

However, during the same briefing, the Chief Executive stated that he cannot stop tariffication.

“What is the other remedy? Nothing. I cannot stop tariffication. Why? To erase corruption,” he said.

President Duterte earlier expressed his support for the passage of the RTL, saying that it is a move for the “greater good” of the agricultural sector in the country.

“It is a move that is intended to serve the greater interest of the majority of the people,” Duterte said.

The President signed the law in February this year to address the rice supply shortage and soaring inflation through importation, but farmers have struggled under the law, complaining that the price of palay (unhusked rice) has dropped to P7 from P11 a kilo due to a deluge of cheap rice imports.

Under the law, the government is mandated to allot P10 billion to aid farmers, P5 billion of which should go to the mechanization of rice farming, P3 billion to the distribution of inbred rice seeds, P1 billion to credit for farmers and another P1 billion for their skills development.

Young lass hugs packs of government rice as if clinging to dear life as the administration engages in a tough balancing act of keeping prices within reach and helping farmers survive. AFP

A separate proposal had urged a special safeguard duty (SSG) on rice imports instead of suspending rice importation as it would be deemed illegal under the provisions of the RTL.

The Philippine Chamber of Food and Agriculture Inc. (PCAFI) said it stood firm in its support for a “legal” regime in the rice sector via issuance of SSG on imports.

“It takes 30 to 60 days to implement the law. So, it should be issued January-February,” PCAFI president Danilo Fausto said, noting that the import suspension would only offer a temporary relief.

Fausto underscored that the SSG should be implemented by January or February 2020 to ensure imports will not coincide with harvest during the dry season in March to April 2020.

“(This) will help support farmgate prices of palay or unhusked rice to at least P17 per kilo,” Fausto said.

The implementation of SSG is ideally issued just for that dry harvest window, but it may also be immediately lifted once harvest is finished.

The benefit of SSG, aside from being sanctioned by section 10 of Republic Act 11203, is it automatically puts a cap on imports as the price of imported rice becomes at parity with local prices, making Filipino farmers’ rice competitive.

Meanwhile, PCAFI also maintained the needed duty on imported rice should be 70 percent.

At a world market price of $360 per metric ton, the landed cost of imported rice stands at P17 per kilo, which makes it far lower than the P32 to P34 per kilo retail price matching domestic produce if added with 70 percent duty and traders’ margin.

PCAFI said with imported price just matching domestic rice produce, traders will opt to defer importation as imports lose price advantage.

Asked on SSG’s inflationary effect, PCAFI explained that even if domestic rice price inches up a little, inflation may grow only by 1.3 percent.

The projection is still well within the government’s targeted two to four percent inflation rate increase limit.

As mandated by the RTL, the government may impose special safeguard duty on rice per the Safeguard Measures Act to ensure that the country’s rice industry will be protected from extreme price fluctuations.

According to a policy brief prepared by the Philippine Rice Research Institute (PhilRice), rice farmers are projected to lose at least P61.77 billion as the farmgate prices of palay continue to drop due to the influx of imported rice.