Rice Tariff Reduction Ineffective for Lowering Inflation, Asserts Farmers’ Association


Published on: May 31, 2024.

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Federation of Free Farmers Cooperatives: Reducing Tariffs on Imported Rice Won’t Lower Inflation Rate

The Federation of Free Farmers Cooperatives, Inc. (FFFCI) emphasized that reducing tariffs on imported rice will not have an impact on the country’s inflation rate. According to Leonardo Montemayor, FFFCI’s chairman and former Department of Agriculture secretary, the proposed tariff cut will only benefit importers and traders, and consumers will not see any advantages.

In a radio interview, Montemayor stated, “The reduced tariff rate on imported rice will not lower prices for consumers. The price will essentially remain the same, and the importers and traders will be the ones who benefit the most.”

Montemayor expressed his concerns about the alarming proposal to reduce tariffs. He highlighted that rice tariffs from non-ASEAN countries, such as India and Pakistan, have already been lowered for the past four years, but this has not resulted in a corresponding decrease in rice prices for consumers. He emphasized that rice prices remain high.

The FFFCI stated that there is no certainty that reducing the tariff rate from 35 percent to 17.5 percent will effectively address the issue. Montemayor cited the example of Pakistan, which raised the price of rice exported to the Philippines despite the reduced tariff, resulting in no impact on rice prices.

Samahang Industriya ng Agrikultura (SINAG), a farmers’ group, also expressed concerns about cutting tariffs. According to SINAG’s executive director, Jayson Cainglet, reduced tariffs will “penalize” local producers and favor a small group of privileged importers and traders. Despite being under a reduced tariff regime for the past four years, rice prices have continued to increase, Cainglet noted.

Moving forward, Montemayor suggested strengthening the Philippines’ agricultural production and increasing the budget of the Department of Agriculture. He also emphasized the importance of constructing roads in rural areas.

Conclusion

Reducing tariffs on imported rice has raised concerns among the Federation of Free Farmers Cooperatives, Inc. (FFFCI) and the farmers’ group Samahang Industriya ng Agrikultura (SINAG). Both organizations believe that consumers will not benefit from the proposed tariff cut, as rice prices are unlikely to decrease. Instead, importers and traders are expected to be the primary beneficiaries. The FFFCI and SINAG call for a focus on strengthening agricultural production and improving infrastructure to support local farmers.

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