Farmers chide Senator Villar for ignoring effects of import undervaluation on rice farmers

Farmers chide Senator Villar for ignoring
effects of import undervaluation on rice farmers
(26 July 2019)

The Federation of Free Farmers (FFF) scored Senator Cynthia Villar’s recent claim that she could not do anything about the reported undervaluation of rice imports. When asked about the issue in a recent press interview, Senator Villar reportedly replied “That’s BOC’s (Bureau of Customs) problem, not mine”.

Earlier, the BOC and the Department of Finance (DoF) had released figures which implied that the average landed cost of rice imports, inclusive of tariffs, was only $227 per metric ton compared to between $391 to $422 if based on internationally published prices. Since tariffs are based on the declared value of the imports, importers could have shortchanged the government by up to Php 5 billion already by undervaluing their imports. Meanwhile, the Philippine Statistics Authority (PSA) reported that palay prices had dropped by 23% since their peak in September 2018, coinciding with the inflow of possibly undervalued rice imports.

“We are very disappointed with Senator Villar’s reaction of washing her hands off the problem and passing the buck to other people. She was the main author of the rice tariffication law (RA 11203), so she should bear some responsibility for the flood of rice imports that is now wreaking havoc on the lives of millions of small rice farmers. She is also the Chairperson of the Senate Committee on Agriculture, so she should be more proactive in addressing the urgent problems besetting the rice sector at the moment.”, said Raul Montemayor, FFF National Manager.

Montemayor also expressed bewilderment over Senator Villar’s claim in the same interview that it was too early to review the Rice Tariffication Law at this time because the law had not yet been implemented. “President Duterte signed RA 11203 into law in February 2019 as a result of her prodding. Since then, more than 1.5 million tons of imported rice have entered the country. Some rice millers have reportedly stopped operations because of the glut in the market. Palay prices in turn have gone down drastically. What is she waiting for before she acts? She cannot keep on experimenting with the lives of rice farmers. Does she want farmers to suffer even more before she deems it proper to review the law or at least call a Senate hearing to look into the reported undervaluation of rice imports?”, asked Montemayor.

The FFF has joined calls for critical amendments to the Rice Tariffication Law, including the reinstatement of the prerogative of the government to temporarily reimpose quantitative restrictions or QRs during crisis situations. “We are happy that President Duterte recently heeded calls to address the drop in palay prices by reportedly agreeing to ban imports during the harvest season. However, RA 11203 which Senator Villar authored and asked President Duterte to sign into law actually prohibits the President and the government as a whole from reimposing QRs, whether seasonal or temporary.”, explained Montemayor. Section 3 of RA 11203 repealed all laws “and provisions of law prescribing quantitative import restrictions or granting government agencies the power to impose such restrictions on agricultural products or hindering the liberalization of the importation, exportation and trading of rice”.

“Ironically, World Trade Organization (WTO) rules actually allow the reimposition of QRs under certain conditions such as what rice farmers are facing now. Congress even passed the Safeguards Measures Act (RA 8800) in 2000 which incorporated basically the same WTO provisions. However, Senator Villar insisted on unilaterally repealing this trade remedy measure and waiving our right to temporarily use QRs during emergencies. In effect, she tied the hands of the President and has now placed him in a legal dilemma with his pronouncements about banning rice imports during harvest time.”, added Montemayor.

The FFF also belied Senator Villar’s claims that the proposed National Single Window (NSW) which was incorporated in RA 11203 will address problems arising from smuggling and undervaluation of imports. “The NSW is actually designed and intended to be a trade facilitation measure that will in fact make it easier for importers to bring in their cargoes. The NSW will enable them to submit all required documents electronically through a ‘single window’ instead of having to deal with multiple agencies. It is not specifically configured to detect smuggling or undervaluation. Besides, you do not need a complicated system to detect undervaluation. You simply compare the declared values with a reference rate. This can be easily automated so that any attempt to undervalue imports will immediately send warning signals to the proper authorities.”, said Montemayor.