Rice Tariffication Law jitters farmers, retailers

Natural rice in a red ceramic bowl on stone background. closeup

BAGUIO CITY – This early, farmers and retailers are feeling the jitters on the possible impacts of the removal the quantitative restriction on rice imports.

Solidarity of Peasants Against Exploitation (Stop Exploitation) said the Rice Tariffication Law, like other policies that deregulated trade and industry, will lead to higher prices and ruin local production.

“Napadasen ti Ilocos ti epekto ti panangilukat ti pagtagilakoan iti imported a produkto nga agrikultura (Ilocos already experienced the effect of opening our local market to agricultural imports),” explained Antonino Pugyao, chair of Stop Exploitation.

Pugyao recalled that prior to the liberalization Philippine agriculture, Ilocos was the center of garlic production.

“Ngem idin umayen ti imported a bawang, niribribun mannalon ti nalugi ken nailumlom iti utang ta adaddan a ti nalaka nga imported a bawang ti naglayos kadagiti tiendaan (But when imported garlics came, the cheap garlic flooded the local market and thousands of farmers went bankrupt and buried in debts),” he said.

Learn from the “garlic tragedy.” Pugyao recalled that cheap garlic was temporary, after destroying local production and becoming dependent on imports, the price of garlic rapidly went up.

He said that contrary to the government’s claim that decreased garlic production caused importation, its trade liberalization that forced cheap agricultural products to enter the local market.

According to him since the Philippines’ entry to the ASEAN Free Trade Agreement in 1994 and enforcement of the 1995 Uruguay Talks that gave birth to the World Trade Organization (WTO), garlic farmers have struggled to compete with the imported ones.

“Saanda kabaelan ti makikompetansia gapu ti nangina a gastos ti panangpartuat ti produkto ken kinaawan ti suporta ti gobierno isu a mapilitanda nga agmula ti sabali (Unable to compete due to high cost of production and lacking government support, local farmers were left with no choice but to shift to other crops),” he said.

Based on government data, onion production had a rapid drop from 1992-1994 and failed to recover ever since. While garlic yield dropped in 1996-1997 and remains to be low to date. On the same period, tomato and corn production.

“Sigurado kami a kastoy ti turungen daytoy baro a linteg. Kangrunaan nga agbenepisio ket dagiti negosiante, saan a ti umili (We are sure the new law will have the same effect. Its the businesses that will primarily benefit),” Pugyao said.

Retailers protest. In a related event, the Confederation of Grains Retailers (GRECON) Ifugao Chapter rallied against rice tariffication day before the it was signed. Employees of the National Food Authority (NFA) joined the protest.

“We are opposing the passage of this bill because there will be no cheap rice like the NFA rice. All will be commercial rice in the market with unaffordable prices,” said GRECON – Ifugao Chapter President Jose Mondiguing.

With the law’s passage, private traders and corporations are now free to import rice upon complying with the necessary tariff and permits depriving the NFA of its role and regulatory functions explained provincial manager Heidy Pasion.

“The NFA will be hard-up in controlling price increase in the market if we don’t have the stabilization function,” she said.

Death sentence. Kilusang Magbubukid ng Pilipinas (KMP) said the measure is “equivalent to a death sentence” for farmers and the local rice industry.

KMP chair Danilo Ramos underscored that local rice producers are the first to suffer from unregulated and massive rice importation.

“Our decades of experience under the World Trade Organization proved that rice importation policy was never a guarantee of sufficient rice supply and lower rice prices,” Ramos added.

He said that massive rice imports will destroy the local rice industry even with industry enhancement fund.

Insufficient to protect. The law provides for the creation of Rice Competitiveness Enhancement Fund to support the local industry with an annual allotment of P10 billion for six years. After the period, Congress is expected to appropriate higher amount from the tariff revenues from the law.

The fund will be utilized to provide material and technical assistance to rice farmers and cushion the impact of extreme price flactuation.

Stop Exploitation said the fund is not enough to protect farmers, not even amount to provide sufficient fertilizers to 5 million poor farmers.

“Nalawag a saan nga umanay ti nasao a pondo tapno matulonganna ti agrikultura tapno makapartuat tayo iti ad-adu nga irik wenno bagas (It is clear the fund is not sufficient to increase rice production,” he added.

According to Pugyao, the amount is miniscule compared to other countries in Asia that provide similar funds to their farmers like Taiwan $45 billion and Indonesia $25 billion.

Based on Stop Exploitation data, at least 54,000 farmers in Region 1 will be affected by the law. About 10% of the country’s total rice is produced in the region according to government figures.

The sponsor and principal author of the law, Senator Cynthia Villar, believe the law will help improve farmers’ “profitability and competitiveness.” While the Duterte administration sees the law as one measure against steep inflation.