Rice Tarriffication: Bane or Boon?

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With DNX Research

Image from Philippine Rice Research Institute.
Image from Philippine Rice Research Institute

If you are an avid social media user, you often see the phrase ‘Rice Tarrification Law’ associated with Senator Cynthia Villar, but what is Rice Tarrification Law and what does it have to do with the senator?

The law would create a Rice Competitiveness Enhancement Fund (RCEF), which appropriates a targeted P10 billion for the next six years as special rice safeguard duty in order to protect the nation’s rice industry from sudden or extreme price fluctuations.

A law that aims to help the Filipino farmers and Philippine economy by welcoming exported rice from all parts the world, the funds would also be used to provide assistance to the country’s farmers such as development of inbred rice seeds, development of rice farm equipment, and skills enhancement.

WHAT IS IT ABOUT?

According to the Press Release of the Senate of the Philippines, 50% of the RCEF shall be used to aid eligible farmers associations, and registered rice cooperatives and LGUs, by improving farm mechanization through rice farm equipment; the 30% of RCEF will be used for the development, propagation and promotion of inbred rice seeds to rice farmers; 10% will be available in form of credit with minimal interest to rice farmers and cooperatives; and the other 10% is for the extension services to Philmech, PhilRice, ATI, and TESDA  to teach and enhance skills on rice crop production, modern rice farming techniques, seed production, farm mechanization, and knowledge/technology transfer thru farm schools nationwide.

In the exportation of rice, 35% or the import duty rate commitment of the Philippines for rice importation shall be the rate for ASEAN member states, pursuant to the ASEAN Trade in Goods Agreement, and 50% or the tariff equivalent calculated in accordance with the World Trade Organization agreement on agriculture shall be the rate for non-ASEAN member states.

THE AUTHORS

Republic Act 11203: An Act Liberalizing the Importation, Exportation and Trading of Rice Lifting For the Purpose the Quantitative Import Restriction on Rice or also known as Rice Tarrification Law is a bill that was filed on September 11, 2018 by Senators Ralph G. Recto, Leila M. De Lima, Joel Villanueva, Risa Hontiveros, Sherwin T. Gatchalian, Grace L. Poe, Emmanuel “Manny” D. Pacquaio, and was mainly authored and sponsored by Senator Cynthia Villar was approved.  President Rodrigo Duterte signed this on February 14.

IMPLICATIONS

The Rice Tarrification Law opened up markets for imported rice, thus driving down the cost of locally-grown rice.  Although the RCEF was established, it benefited only registered rice cooperatives and eligible rice associations.

This means that unregistered farmers are affected by the liberalization of the market for rice, thus the stories of rice farmers’ profits suffering from the measure.

1 COMMENT

  1. This article sheds light on what the law really means from the top to the bottom. Thanks for translating the law into something that makes a lot of sense to the readers.

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