Government urged to provide assistance to farmers

MANILA, Philippines — The government should hasten the provision of assistance to rice farmers affected by the rice tariffication law as the brunt of losses will continue to be felt in the next five years, according to state-run think tank Philippine Institute for Development Studies (PIDS).

Citing a recent study, PIDS senior research fellow Roehlano Briones said that despite the positive impact to consumers, palay farmers will experience significant loses in the next five up to 10 years.

The policy think tank’s study on the effects of the change in the rice trade regime showed that  imports over a decade will grow at about 29 percent, a 22-percent difference from the projected growth of 7.1 percent without tariffication. In the next five years, imports will grow by 52.8 percent.

On the production side, palay production is seen to decline by 1.8 percent, a reversal of the 2.5 percent projected growth if tariffication is not in place.

For the five year projection, palay production is expected to decline  by 5.7 percent, in contrast to a 2.8 percent growth without tariffication.

Harvest area for palay is also seen declining by 1.1 percent within 10 years versus a 0.9 percent growth without tariffication.

Within the next five years, a 3.3 percent decline in harvest area can be expected in contrast to a one percent growth without tariffication.

Farmgate prices of palay can be expected to grow by only 0.8 percent under the law in contrast to the projected 1.6 percent growth without tariffication.

In line with increased rice supply, retail prices will continue to plummet at a negative 1.7 percent rate by 2030 under the law in contrast to a 0.6 percent growth without tariffication.

Farmers’ income will grow by only 0.9 percent in 10 years’ time with the tariffication law in place in contrast with the 2.7 percent growth projection without it.

Within the next five years, farmers’ income growth will be flat compared with a 2.5 percent projected growth rate in the absence of the law.

Despite these results, Briones said the government should continue to implement the Rice Tariffication Law because of its long-term benefits to consumers who were paying for rice at 100 percent more than other Asian countries like Vietnam and India.

“If you want Philippine society to benefit in the long run, we should maintain the law,” said Briones.

At the same time, the government should hasten the provision of compensation for farmers affected by the reform.

“We do not deny the analysis that clearly points out the loss suffered by palay farmers. They actually have a point when they ask, ‘Why are we going to take a hit for the Filipino consumer?’” said Briones.

“If the consumers really benefit, maybe rice farmers can share in the benefit,” he added.

The Rice Tariffication Act amends the two-decade-old Agricultural Tariffication Act of 1996 and replaces the quantitative restrictions (QR) on rice imports with a 35 percent tariff.

Under the new import regime, legitimate rice traders can import rice from various sources without permit from the National Food Authority (NFA), provided they secure a sanitary and phytosanitary import clearance from the Bureau of Plant Industry of the Department of Agriculture (DA) and pay the appropriate tariff to the Bureau of Customs.

The law, which had been languishing in the legislative mill for years, was hurriedly passed early this year to drive down rising inflation.

The law provides for a P10 billion Rice Fund to be used for productivity measures in affected rice farms.

Additional revenues from tariffs can be used for other purposes such as financial assistance, expanded crop insurance on rice, and crop diversification program for farmers who want to shift to other crops.