REPUBLIC ACT No. 11203 or the Rice Tariffication Law is not working as planned and has not delivered the promised reduction in prices and higher yields, the Federation of Free Farmers (FFF) said.
In a study released Monday, FFF National Manager Raul Q. Montemayor said consumers have paid more for rice while producers have lost billions of pesos in income two years into the law’s implementation.
“Consumers had to fork over an extra P8.59 billion in 2019 for their rice needs. In 2020, retail prices were only marginally lower, resulting in relatively small consumer savings of P2.43 billion or about P22 per person for the whole year,” Mr. Montemayor said.
Passed in 2019, the law allowed rice to be imported more freely but charged tariffs of 35% on grain imported from Southeast Asia. The tariffs were to provide P10 billion a year to the Rice Competitiveness Enhancement Fund (RCEF) to help the rice industry modernize.
According to Mr. Montemayor, rice imports totaled 2.12 million metric tons (MT) in 2020, against 3.17 million MT in 2019. He maintained that retail prices have hardly budged from their 2017 levels.
He said the average price of a kilogram of well-milled rice in 2020 was P41.67 compared to P42.03 in 2017, while a kilogram of regular-milled rice was P36.93 in 2020, against P37.09 in 2017.
“It is now seen that rice prices for consumers will not go down just because we allow more imports to come in. The government must step in to ensure that the gains from liberalization are equitably distributed along the rice value chain,” Mr. Montemayor said.
Mr. Montemayor said farmers absorbed P56 billion in foregone revenue during the two-year implementation of the law, adding that farmer incomes fell by an average of P6,000 per hectare per season.
He added that market intermediaries such as traders, millers, importers, and wholesalers have benefited the most from the implementation of the law.
“Wholesalers and retailers gained an extra P35 billion in 2019 and another P43 billion in 2020 even as farmers reeled from their losses during the two-year period,” Mr. Montemayor said.
“In 2020, importer margins declined significantly due to the uptick in international rice prices. Still, importers managed to earn an extra P6.51 billion,” he added.
Mr. Montemayor said there is a need for the government to develop an effective strategy to balance imports with domestic supply and to prevent shortages or excess inventories, while also finding ways to increase the competitiveness of rice farmers.
“(The DA) must recast its programs to assist farmers, anticipate instead of just react to problems, and ensure that funds are spent wisely and effectively. We need to revisit the law itself to respond to these challenges,” Mr. Montemayor said.
Asked to comment, Department of Agriculture (DA) Spokesman Noel O. Reyes said in a mobile phone message that the DA’s rice policy team will check the FFF’s study, but said that rice farmers’ cooperatives and associations are happy with the benefits of the law.
Mr. Reyes added that some farmers’ groups belonging to the FFF were also recipients of RCEF-funded interventions.
“They do not want to recognize and accept that the law is gaining ground, benefiting tens of thousands of rice farmers and their families, enabling them to increase their productivity and incomes. Many associations and cooperatives have received farm equipment and machinery, free seed, loans, and training,” Mr. Reyes said. — Revin Mikhael D. Ochave
