HE WOULD NOT BLAME THE RTL
By Mortz C.
Ortigoza
A leader of
the agricultural stakeholders’ group would not blame the Rice Tariffication Law
(RTL) for the flood of cheap prices of imported staple in the market that saw
Filipino farmers reel in misery because of the decline of the prices of their
products.
Samahan ng Industriyang Agrikultura (SINAG) Chairman Rosendo So said he condemned the reduction of tariffs by the government to rice exporting countries outside the Association of South East Asian Nation (ASEAN) and the delay of the yearly financial allocation of P10 billion from the Rice Competitiveness Enhancement Fund (RCEF) as the culprits.
“Ang problem lang ngayon is itong mga months
ago nag sign si Secretary (William Dar) maibaba iyong tariff na outside ASEAN.
Kasi ang ASEAN may agreement na 35%. Pero outside ASEAN India and others dapat
sa fifty percent iyon,” he explained about the reduction of duty from
50% to 35% of imported rice from countries outside the ASEAN signed by President
Rodrigo Duterte in May 15, 2021.
The tariff adjustment
signed by the President was due to the rising prices of the staple in
Vietnam and Thailand – two members of the ASEAN that have been given the most favored
nation (MFN) privileged with 35% duty by the Philippines as part of the treaty.
With
countries like India given MFN of 35% from the old 50% tariff, the government
expect a cheaper price of the rice being imported.
Some of the objectives of the RTL (known too as the Rice Liberalization Act) or Republic Act No. 11203 are the following:
1. Fulfill the Philippines
international commitment where it joined the World Trade Organization in 1995.
Replace the minimum access volume (MAV) on rice with another form of protection
that is more transparent and generate revenues to support – or a tariff;
2. Ensure the availability of rice in
the domestic market for the accessibility of greater majority of the population
by allowing more private traders – big or small- to participate in the
importation of rice;
3. Provide farmers equal protection
with 35% and higher tariff rates on rice imports and preferential assistance to
rice farmers adversely affected by tariffication;
4. Provide opportunity to farmers to
earn more with the world market. The law also lifted the restriction on rice
exportation to encourage farmers to produce much better quality heirloom or
traditional rice geared to exports.
Although
the Philippines commitment to the World Trade Organization (WTO) to open her
rice industry from tariffication was in year 2020, the surging inflation of the
staple’s price in 2018 prompted Congress to pass the RTL.
The advantages
of the statute according to its proponents are the lowering of the retail
prices of the staple for the consumers, address the rice shortage, reduce the
prices of rice in the market, and curtail corruption and cartel’s domination in
the rice industry.
Based on
empirical evidence from official government polls' Philippines
Statistics Authority, it shows the decline of the prices of rice – the No.1
contributor of inflation in 2018 – because of the following:
- The average retail price of regular milled rice dropped from its peak of P45 per kilo in 2018 to P38 per kilo in 2019 (when RTL was signed), a saving of P7 per kilo for the poor consumers.
 |
| CHEAPER RICE in Dagupan City in June 2021. These varying prices of the staple were due to the Rice Tariffication Law (RTL) signed in 2018 by President Rodrigo Duterte. The skyrocketing of the prices of rice was the linchpin of inflation in that year that caused Congress to pass the Rice Liberalization Act. (Photo by the Writer) |
-
The biggest gainers are the consumers who are
buying cheaper and better quality rice. They did not have to wait for hours in
rice pila (queue) during the height of the pandemic just to get a few kilos of
rice. Rice pila became ubiquitous in our urban centers in the country.
The SINAG
Chair said even without the RTL the prices of palay would plunge because
importation of the staple was already open in the Philippines’ market.
He did not
blame the reduction of the tariff when asked by this writer if the RTL was
economically wrong because it spawned misery to the farmers and other who
benefited on the paddy rice’s industry – who composed 2.4 million of the 110
million population.
“Ang nakikita nating ano na problem doon sa
rice tariff is iyong mga pundo na binigay kasi more than P20 billion ang
collection pero iyong P10 billion na-allocate sa Philippine Rice, Philippines
Mechanization, iyong remaining P10 billion up to now hindi pa binibigay ng
government. Iyon ang dapat tingnan natin paano ang dapat maibigay sa ating
magsasaka,” he told this newspaper in September 21 this year.
The law created RCEF with a fund mechanism that will be
created from tariff revenues of rice imports and will be used to directly
support rice farmers and fund innovative undertakings of the government to
further strengthen the rice industry. It aims to provide key interventions to
support farmers and enhance their competitiveness and profitability, including
farm machinery and equipment to improve farm operation, rice seed development
propagation and promotion, expanded rice credit and extension services.
The RCEF will pipe in P10 billion yearly to the rice sectors
for the next six years.
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