From aiming to make the country self-sufficient in rice, the government now wants to flood the market with imports. The objective is to cut rice retail prices by about P7 per kilo, as announced by President Duterte.
How could this be possible? Quantitative restrictions will be lifted and replaced with a 35 percent tariff, which is expected to spur more rice imports. The tariff collected will go to a so-called rice competitiveness enhancement fund or RCEF that will finance interventions for boosting local rice production, lowering costs and enabling farmers to compete with imports, thus cutting prices.
Or at least that’s the plan. Considering the inefficiency and corruption that chronically plague the bureaucracy, however, this plan calls for a thorough fine-tuning before implementation. Especially because corruption scandals have erupted over rice importations and the misuse of farm subsidies in the past.
The agriculture chief himself has reportedly cautioned consumers that it could take from three to four years before rice prices can be cut by P7 per kilo even after the government has implemented the interventions financed through the estimated P20 billion expected in tariff collections. This is presuming that the funds will go to their intended purpose and the importations will be graft-free.
While waiting for the interventions, what will be felt immediately is the impact of the flood of imported rice, a number of them cheaper than local crops of comparable variety, on Filipino farmers. For those living a hand-to-mouth existence, this could spell catastrophe. A flood of cheap imported or smuggled items killed the local textile and apparel industry. Cheap imports also cut local production of garlic, even if the Ilocos variety is one of the best in the world.
Rice, the country’s staple, is a politically sensitive crop. Striking a balance between shielding consumers from price surges and protecting local farmers has always been a challenging task. There are enough cautionary tales surrounding other products and sectors to make policy makers move with extra care in rice tariffication.