Proposed rice tariff seen to generate ₱10-B tax

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Metro Manila (CNN Philippines, October 11) — The proposed rice tariff scheme is expected to generate an estimated ₱10 billion worth of taxes which the government can tap to support farmers.

Senator Win Gatchalian, coauthor of the bill and Senate Economic Affairs Committee chairman, on Thursday said the tax proceeds will be used to fund programs that will help farmers compete with others in the region.

Under the proposed measure, businesses and individuals can outsource rice from other countries, but will have to pay 35 percent tariff.

"The concept here is whatever we collect from the tarrif will be ploughed back to the farmers to make them competitive," Gatchalian told CNN Philippines' On The Record.

The lawmaker said only 70 percent of rice-producing provinces in the country can compete with foreign rice producers.

"We looked at the rice producing provinces and 60 percent to 70 percent of rice producing provinces are quite competitive na, meaning they can compete with imported rice. We have to take care of the 30 percent [of the] provinces," he said.

Gatchalian said the government will specifically focus on "mechanization" and "innovation" initiatives.

"We have to buy equipment to improve the productivity and output of these areas. We have to plant disaster resilient varieties," he said.

Cheaper rice

Despite the 35-percent tax, Gatchalian said the policy will lead to cheaper rice in the market. Economic managers have also previously said that removing quantitative restrictions on rice imports would lead to adequate supply and cheaper cost of the grain staple.

"Even though we imposed 35 percent tariff, we calculated about maximum of ₱35 per killo ang all-in cost if we bring in imported rice," he stressed.

"If the private sector will import the rice we will now see cheaper rice come into the market and much more effective distribution to different parts of the country," he added.

A consumer group, however, lambasted the proposal, saying that the entry of imported rice will further weaken the production of local farmers.

"Ngayon pa lang ramdam na ng mga magsasaka itong paparating na imported rice na talagang naiisantabi ang kanilang produkto. Mas lalo pang mamamatay ang industriya ng bigas sa pagpasok ng imported na bigas," Bantay Bigas Spokesperson Cathy Estavillo said during the program, adding that the government should not rely on other countries to address the lack of rice supply.

[Translation: As early as now, farmers' produce are getting left behind. The rice production will further weaken with the entry of imported supplies.]

According to her, local producers are lagging behind their counterparts in neighboring countries due to lack of support from the public sector.

"Mali yung patakaran ng gobyerno na open na talaga ang industriya ng bigas na magpasok ng imported na bigas. Hindi dapat iasa ng gobyerno ang ating staple food sa importation dahil isang agrikultural na bansa tayo," she said.

[Translation: The government's policy of allowing the entry of imported rice is wrong. They should not rely on importation to supply our staple food because we are an agricultural country.]

Instead, Estavillo said the government should provide long-term solutions to the problems that farmers are currently facing such as the lack of proper irrigation.

"Kung talagang gustong resolbahin ng gobyerno yung kakapusan natin sa bigas, kailangan lang ng mga magsasaka ng talagang direct support sa kanila gaya ng ginagawa ng Vietnam at Thailand sa kanilang magsasaka," she said.

[Translation: If the government really wants to solve the problem of rice shortage, they should provide farmers with direct support just like what Vietnam and Thailand do.]

President Rodrigo Duterte on Wednesday called for the swift passage of the proposal in Congress.

In letters addressed to Senate President Vicente Sotto III and House Speaker Gloria Arroyo, Duterte certified the rice tariffication bill as urgent.

The move, the President said, aims to "address the urgent need to improve availability of rice in the country, prevent rice shortage, reduce prices of rice, and curtail the prevalence of corruption and cartel domination in the rice industry."

The House of Representatives in August passed its version of the measure while the Senate has yet to act on the proposal.

The bill is seen as among the measures that will help address the rising prices of widely-used goods in the country or inflation, which hit a nine-year high of 6.7 percent in September.