Rice tariffication bill enacted into law

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Metro Manila (CNN Philippines, February 15) — The rice tariffication bill has been enacted into law, Presidential Spokesperson Salvador Panelo confirmed Friday.

President Rodrigo Duterte certified the law as urgent in October. The bill aims to lower the price of rice by easing import restrictions, which in turn would increase the supply in the country.

Under the law, businesses and individuals can buy rice from foreign sources and just pay the 40 percent tariff. Tax proceeds will fund programs to help farmers such as mass irrigation, rice storage and research initiatives.

Economic managers believe the bill would arrest rice prices in the market, which at a time hit ?70 per kilo in some areas last year.

However, for militant farmers' group Kilusan ng Magbubukid ng Pilipinas (KMP), this is a "total lie."

"Under rice tariffication and a deregulated rice industry, the opposite is likely to happen. We can expect and brace for increasing rice prices in the next weeks and months due to the speculative nature of global rice prices," KMP Secretary General Antonio Flores said in a statement.

'Death warrant'

In a statement, Senate Committee on Agriculture and Food Chairperson Cynthia Villar said that the law would help local farmers be more competitive.

"With the expiration of the quantitative restriction on rice importation, this is a very important piece of legislation, which will help our farmers improve their profitability and competitiveness," Villar said.

She added that this is because the law provided for a competitiveness enhancement fund.

"We thank and laud the President for signing into law the bill creating a package of support programs for farmers, most notably the ₱10 billion Rice Competitiveness Enhancement Fund," she said.

Half of this amount would fund rice farm machinery and equipment for eligible farmer groups, rice cooperatives and local government units, while 30 percent would go to rice seed development, propagation and promotion, and 10 percent each to rice credit assistance and rice extension services.

The fund will also be a source of direct financial assistance to farmers tilling two hectares and below in the form of "compensation" for projected losses due to rice liberalization.

However, the KMP said that even with this fund, the local rice industry still does not stand a chance against massive rice imports.

"Ano pa bang paggagamitan natin nung farm equipment and machineries? Ano pa 'yung pagtataniman nung ating mga punlang palay kung papalaking area naman natin na pinagtataniman ng palay ay kalaunan mawawala sa local rice production po natin," former Agrarian Reform Secretary Rafael Mariano told CNN Philippines. "Sino pong magsasaka ang magtutuloy na magtanim ng palay kung bumabaha ang imported na bigas?"

[Translation: What else would we use farm equipments and machineries for? Where would we plant our grains if more of our areas where we plant grains would eventually be lost from our local rice production? Who would continue to farm and plant grains if imported rice flooded the market?]

The group called Duterte's signing of the rice tariffication law as a "death warrant" for the local rice industry, as it would usher in imported rice which would "wipe out" local rice farmers, who already bear the high cost of palay (grain) production, while its buying price remains low.

Grains Retailers Confederation of the Philippines Spokesperson Orlando Manuntag told CNN Philippines' Business Roundup that the government should fully subsidize farmers — like what Thailand and Vietnam do — so they can compete against imported rice.

"'Pag natulungan natin 'yung farmers natin, tataas ang production nila. So bababa ang kanilang cost of production dahil mataas ang kanilang productivity. So bababa ang pagbenta ng kanilang palay at matutulungan natin ang consumers natin na bumaba ang presyo at makasabay tayo sa imported rice," he said.

[Translation: If we would help our farmers, their productivity will increase. So their cost of production will go down because their productivity is up. So the rates at which they sell their grains will go down and would help our consumers by bringing down prices and we can keep up with imported rice.]

Senator Francis "Kiko" Pangilinan said concerned groups should keep an eye on the implementation of the Rice Competitiveness Enhancement Fund to ensure that farmers will feel the aid provided by the law.

CNN Philippines' Carolyn Bonquin, Frances Josephine Espeso and Xave Gregorio contributed to this report.