Farmers’ group urges review of RTL

MANILA, Philippines — The Federation of Free Farmers (FFF) is pushing Congress to review and amend the Rice Tariffication Law (RTL) amid the rise in prices and a looming rice crisis later this year.

In a statement, the FFF said the proponents of RTL were not able to anticipate a situation where both imports and local production are low, and government prevented from importing rice.

The RTL removed government controls over rice imports and fully liberalized the rice trade.

“We must also introduce additional safeguards to protect our farmers in the reverse situation, where farmgate prices are very depressed due to excessive imports,” the FFF said.

The farmers’ group said the current crisis was traced to the huge drop in palay (unhusked rice) production last year mainly due to high fertilizer prices, which discouraged farmers from planting.

Based on data from the Philippine Statistics Authority (PSA) and import volumes recorded by the Bureau of Customs, the FFF estimated that palay output only reached 16.4 million metric tons (MT) last year, which is 18 percent lower than the  harvest volume of 19.96 million MT in 2021.

Because of the low local production, the carryover rice stock going into 2023 amounted to only 1.765 million MT, even with an all-time high importation of 3.84 million MT last year.

The carryover is only good for 48 days, as against the usual average of 80 to 100 days.

The FFF also said the decline in carryover stocks coincided with the increase in international prices of rice.

This resulted in lower rice importation to 790,000 MT in the first quarter versus 927,000 MT in the same period last year.

The FFF said an additional 1.2 million MT of imported rice may be needed to attain a 60-day national stock level before the onset of the July-September lean months.

The group also noted that the planned government importation of 330,000 MT would not suffice to fill up the supply gap in case the private sector decides to scale down their imports.

“Ironically, the plan to import rice may resurrect concerns about government interference in the rice trade, especially if the NFA (National Food Authority) undersells private traders in the market or government imposes price controls. This will further discourage traders from importing rice,” FFF national manager said Raul Montemayor said.

The FFF also questioned the legality of government importation, noting that the RTL specifically mandated NFA to procure its buffer stocks only from local farmers, and effectively banned it from importing rice.

“If the government courses the importation through another agency, it will still violate the RTL’s principal policy of fully entrusting the management of the rice market, including imports, to the private sector,” Montemayor said.

To augment the NFA’s inventory, the FFF urged the government to raise its palay buying price or procure rice from farmers and their organizations through auction and similar means, instead of relying on imports.