DA: Rice tariff to help farmers
Agriculture Secretary Emmanuel Piñol on Thursday said lifting the quantitative restrictions (QR) on rice imports and imposing tariffs would stabilize prices and assured farmers they would become “very competitive” as long as the tariff would be invested in local farms.
“If every year, we will get P10 billion [from the tariff revenues] for the rice industry because of the lifting of the restrictions we can give free seeds to the farmers,” Piñol said in Lingayen, Pangasinan during an inspection of damage caused by flooding to farms.
“We can even subsidize fertilizers and we will be able to achieve our target,” he said during a dialog in the town with rice and vegetable farmers.
Duterte order
In his State of the Nation Address (Sona) on Monday, President Rodrigo Duterte asked Congress to amend Republic Act No. 8178, or the Agricultural Tariffication Act, which imposes a rice import quota.
Tariffs, or taxes, are levied on imported goods “to restrict trade and protect the domestic producers by making imported goods more expensive,” according to the National Economic and Development Authority (Neda).
Quantitative restrictions limit the amount or volume of goods that enter the local market, Neda said, adding that this would “protect local producers by limiting the availability of imported goods.”
RA 8178 exempted imported rice from tariffs in 1996, after the World Trade Organization (WTO) allowed the country to maintain its QR on rice. WTO enforces global free trade.
But Neda has been advocating for the lifting of QR to quell rising inflation and to follow free trade rules.
Costly production
Asked to react on the claim of an agriculture group that rice tariffs would lead to higher prices, Piñol said rice prices have been high because the farmers’ average production is only about 4 metric tons (MT) for every hectare and their average production cost for every kilogram of palay is P12.
“But if we can support them with good seeds, with fertilizers, they could double their harvest,” he said.
“If they [achieve that], the cost of production will be cut in half to P6,” he said.
Mr. Duterte, in his Sona, warned traders and cartels against manipulating rice prices, telling them “you know that I know who you are.”
He said those behind the price manipulation face economic sabotage cases for causing prices to escalate despite sufficient supply. —Gabriel Cardinoza
