MANILA, Philippines — A farmers’ group called on President Rodrigo Duterte to veto a legislation on his desk lifting the more than two-decade-old caps on rice imports, saying the measure would make the government “powerless” should price of rice turns volatile.
Congress last year passed the Rice Tariffication Bill, which seeks to amend the Agricultural Tariffication Act of 1996.
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Under the measure, individuals and businesses can import additional volumes of the crop from Southeast Asian countries like Thailand and Vietnam but will have to pay a 35-percent tariff. The collected tariffs will be used to fund mass irrigation, warehousing and rice research.
Once the bill is signed, the National Food Authority’s corruption-riddled role in rice imports will be removed. The grains agency’s function will be limited to buffer stocking which will be sourced only through buying palay from local farmers.
READ: NFA ponders role under rice tariff regime
“The economic thinkers are saying that a free market will ensure that rice prices will go down even without NFA. They could be correct but what if they are wrong?” Federation of Free Farmers National Business Manager Raul Montemayor said in a statement.
“What if importers collude to bring up prices? What if they refuse to import because prices are too high? What if palay prices suddenly go down because of excessive imports?” Montemayor added.
“The government will be practically powerless in all these scenarios under the proposed bill.”
Based on the central bank’s estimate, scrapping import caps on rice could reduce annual inflation by 0.7 percentage points in 2019.
While the measure is expected to give households reeling from soaring prices a reprieve, farmer groups said replacing rice import limits with a system of tariffs would drive down prices for their produce and hurt their business.
In the same statement, Montemayor said his group is worried that the NFA will likely stop buying from farmers when it acquires sufficient rice for its buffer stock even if palay prices are declining.
“The tariffication bill should focus only on the removal of volume restrictions on rice imports. This is all what we have to do under our commitments to the World Trade Organization,” he said.
“The issue of what happens to NFA and the role of government in the rice trade must be addressed separately and only after a comprehensive study and following genuine consultation with stakeholders,” he added.
The rice tariffication bill was submitted to Malacañang last January 15 for Duterte’s signature. Under the Constitution, the president can either sign the bill or veto it. — Ian Nicolas Cigaral with a report from BusinessWorld