Philippine Farmers Dealt a Blow with Rice Tariff Reduction


Published on: June 8, 2024.

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A decision to slash rice tariffs to 15 percent has drawn criticism from the Federation of Free Farmers (FFF), who argue that it is a blow to the country’s rice farmers and the grain industry. The National Economic and Development Authority Board, led by President Marcos, has approved the new Comprehensive Tariff Program for 2024-2028, which includes reducing the rice tariff for in- and out-quota rates from 35 to 15 percent.

According to FFF national manager Raul Montemayor, NEDA has denied industry stakeholders their right to genuine consultation and due process. He explained that the usual procedure of holding hearings conducted by the Tariff Commission before proposing tariff changes was disregarded this time.

The FFF recalls that during the 2023 Senate hearings on the ratification of the Regional Comprehensive Economic Partnership trade treaty, the executive branch promised rice farmers that rice and other sensitive agricultural commodities would not experience a reduction in tariff protection throughout the agreement. Montemayor expressed disappointment, saying that the NEDA Board has rendered this commitment worthless.

Since the liberalization of the rice industry under the Rice Tariffication Law, which also saw a reduction in tariffs on non-ASEAN rice imports, the FFF claims that the outcome has not been positive. Dependency on imports from the volatile world market has increased from 10 percent of total domestic consumption to around 25 percent, resulting in a rise in rice retail prices.

Moving forward, Agriculture Secretary Francisco Tiu Laurel Jr. met with industry stakeholders to discuss reducing the retail price of rice. The aim is to provide more affordable rice prices to ease the financial burden on consumers, especially the poor, and alleviate inflation and high interest rates.

Under the new tariff rates approved, the government hopes to balance the interests of consumers and local producers while ensuring access and affordability. This move is expected to benefit poor households, including beneficiaries of the government’s conditional cash transfer program.

Speaker Martin Romualdez believes that cutting rice tariffs from 35 to 15 percent will significantly reduce rice prices in the market. Additionally, the government plans to sell imported rice directly through its Kadiwa centers to further lower retail prices. Romualdez reassures farmers that they will continue to receive government assistance through the Rice Competitiveness Enhancement Fund, which has accumulated P16 billion from import tariff collections.

The decision to reduce tariff rates on rice and other commodities has been welcomed by House Deputy Minority Leader Mujiv Hataman. He believes that lower prices will benefit everyone in the market.

Source: Zawya