‘Tariff cut, price ceiling to pull down palay prices’

MANILA, Philippines — The proposed tariff cut on imported rice combined with the rice price ceiling implemented on Sept. 5 will result in the farmgate price of palay further plummeting to P6 per kilo, according to farmers’ group Federation of Free Farmers.

The Foundation for Economic Freedom on Sept. 7 filed a petition to temporarily reduce imported rice tariffs from 35 percent to between zero and 10 percent. This proposal was endorsed by the Department of Finance and the National Economic and Development Authority (NEDA).

“The timing (of the proposed tariff cut) is wrong as the harvest season has already started. The farmgate price of palay went down because of the price ceiling and it will be further aggravated by the proposed cut in the tariff,” FFF national chairman Raul Montemayor said in a radio interview yesterday.

Executive Order 39, which imposed a price ceiling of P41 and P45 for regular and well-milled rice, resulted in the decline of palay prices from P23 to P17 per kilo, he noted.

“I don’t know if they even thought about it or if they really want the farmgate price of palay to fall to bring down the retail prices of rice, but the farmers will suffer. They always resort to importation if there is a problem with the prices. They did not learn,” he said.

The tariff reduction will not ensure lower retail prices of rice.

“What will be the assurance that the tariff reduction will benefit the consumers, especially since most of the imported grains are premium grade and not cheap rice for the poor? It will instead benefit customers of five-star hotels, expensive restaurants, those who buy jasmine rice and Japanese rice. Traders do not import regular milled rice and well-milled rice as they will have more revenues when they import premium grades,” Montemayor explained.

The government should focus on local production instead of resorting to importation, and “if the local production is still not enough, that’s the only time the tariff reduction should be considered,” he said.

“The economic team complained that they were not consulted in the price cap but they did not also consult us in the tariff reduction. They act on their own without talking to each other. They did not consider the effect on the farmers,” he added.

The NEDA called for a review of the existing rice tariffs. –  Ric Sapnu