DA defers additional rice tariff; farmers dismayed

By: Karl R. Ocampo, Philippine Daily Inquirer 12 Oct 2019

MANILA, Philippines — The Department of Agriculture (DA) has decided to defer the implementation of safeguard duties on rice imports this week, even as prices of palay (unmilled rice) sank to an eight-year low.

The move was announced by Agriculture Secretary William Dar at a press conference on Friday, which lasted about five minutes before he walked out as reporters began to press him for details.

“As you all know, we studied the possibility of having to tap the general safeguards duty. The decision by the department is to have this discussed first with the economic development managers (Economic Development Cluster, or the EDC), so we terminated the first study. We will now actively discuss with the EDC on Oct. 24,” Dar said.

He said there would be “no specific timeline” on when the DA, together with the EDC, would come up with a plan.

When asked to give additional details on other measures that the department could push for and if the decision to backtrack was his own, the agriculture chief said he could only say that matters would be discussed, and then walked out.

Below break-even

The enforcement of safeguards could have slapped additional duties on top of the existing tariffs on imports under the rice tariffication law. The policy aims to discourage traders from importing the staple and buy local rice instead.

As of the third week of September, the average buying price of palay hit its lowest in eight years at P15.96 a kilo. The lowest quotation was recorded in Bulacan at P10 a kilo which was already below the estimated break-even production cost at P12 a kilo.

Further price drop

Palay prices have yet to recover since the rice tariffication law took effect in March, and are even expected to dip further with the onset of the main harvest season this month.

As of September, the country’s total rice inventory already stood at 1.84 million metric tons, up 58 percent from last year’s record, according to the Philippine Statistics Authority.

Rice stocks were higher in all sectors in comparison to last year. Stocks in households and commercial warehouses increased by 10.3 percent and 70.5 percent, respectively, while stocks in the National Food Authority’s (NFA) depositories declined by 268.6 percent.

About 41.2 percent of the country’s total rice inventory were in commercial warehouses, while 36.5 percent were in households and 22.2 percent with the NFA.

Dar said earlier this week that the DA would study placing safeguard duties on rice imports which, as farmer groups had warned, led to the plunge in the farm-gate price of palay.

Two weeks ago, Dar acknowledged that the volume of imported rice now exceeded demand, particularly in Metro Manila and also in major urban rice consumption centers.

‘Sense of urgency’

Dar’s announcement on Friday reaped strong criticism from farmer groups, who faulted him for not having “any sense of urgency” to remedy the worsening plight of the local rice industry.

“Why wait for the economic managers given the urgency of the situation? If he really needs to consult, he should have done it earlier. The meeting on Oct. 24 would already be too late for the farmers,” said Raul Montemayor, national manager of the Federation of Free Farmers.

“What will happen to the farmers when palay prices just keep on going down? They don’t have any sense of urgency,” Bantay Bigas spokesperson Cathy Estavillo said.

Call for higher tariffs

“This is going to be a tedious process,” Samahang Industriya ng Agrikultura chair Rosendo So said. “They could instead hold out the issuance of SPS (sanitary and phytosanitary) permits to stop the flooding of imported rice.”

In a statement, Sen. Francis Pangilinan called on the government to raise the tariff on imported rice from 35 to 47 percent.

Pangilinan, the country’s former food security czar, also cited the case of Bulacan province where he said farmers were selling palay at P10 a kilo, or P2 lower than the production cost of the staple.

‘In the red’

“Our farmers are already in the red. Our rice farmers tilled the lands, planted and were done harvesting, but they are losing money,” he said, adding that, “It has been more than two months since I first suggested to address this problem of our farmers.”

Even the World Trade Organization, Pangilinan pointed out, recognized the principles of regular safeguards and agriculture special safeguards for the local agriculture industry. —WITH A REPORT FROM MARLON RAMOS