Pernia: Rice safeguard duty may have to wait ‘1-2 years’

By Bernadette D. Nicolas, Business Mirror, 25 October 2019

FARMERS may have to wait for at least one or two years before they can get protection from the influx of rice imports as a result of the rice trade liberalization law.

Socioeconomic Planning Secretary Ernesto M. Pernia admitted that the preliminary investigation of the Department of Agriculture (DA) was terminated because of the opposition of the National Economic and Development Authority (Neda) and the Department of Finance (DOF). The two agencies deemed it “too soon” to impose safeguard duty on rice imports.

“We actually terminated it because we expressed opposition. DOF and Neda expressed opposition because it’s too early. It’s so soon. So my proposal was let it play out muna [for a while] for at least a year. Tignan natin [Let’s see] how it goes,” Pernia told the BusinessMirror shortly after the Cabinet-level Economic Development Cluster (EDC) met on Wednesday.

While he said the process has been terminated so far “for now,” there is still a possibility they may consider imposing safeguard duty in the future.

Asked at what point will the government consider doing this, Pernia replied: “Ah siguro [maybe] if these [very low palay prices] persist for one or two years, then that’s the time siguro.”

Aside from this, he said the government can also consider limiting rice imports during the harvest season “so as not to compete with local palay.” However, he said this may not happen so soon.

If, for example, palay prices plunge during the harvest season, he explained, “you should refrain from importing.”

‘Not confident’

However, Finance Secretary Carlos G. Dominguez III said in a separate briefing that DA did not bring up the issue on safeguard duty on rice imports at the EDC meeting late Wednesday, as the agency was “not confident” to push for this move.

“They are not confident in pushing this idea. Maybe they don’t have all the numbers to their satisfaction, so we didn’t discuss it today,” Dominguez said.

“You have to understand that this decision-making has to be data-driven. And I’m sure that DA is looking at the data, so we’ll certainly listen to them if and when they bring it up,” he added.

The farm-gate price of palay is expected to further slide in the coming weeks as rice harvest peaks, coupled with the unhindered influx of imported staple in the domestic market.

The average farm-gate price of dry palay fell to a fresh eight-year low in the first week of October, just as the country enters the main harvest season for the crop.

Preliminary figures from the Philippine Statistics Authority showed the average farm-gate prices of dry palay declined by 28.82 percent to P15.56 per kilogram from P21.86 per kilogram last year.

It is now the lowest since the P15.48 per kilogram recorded in the second week of November 2011.

Wiped out in 2 years

Sought for comment on Pernia’s estimates that safeguard duties may be considered only after one or two years, former Agriculture Undersecretary Segfredo R. Serrano said the duties may be useless after two years if current market situation—farm-gate prices are plunging amid the unabated entry of imports—continues. This could “obliterate” local farmers, he said.

“The way things are now, the industry’s primary sector would have been obliterated by the heavily subsidized foreign competition. So of what use is safeguard action if there is no more sector to safeguard?” Serrano told the BusinessMirror on Thursday.

Serrano advised Pernia to read the relevant laws on safeguard duties as no law or implementing rules and regulations put a moratorium on the utilization of such trade remedy.

“Stakeholders can petition anytime they feel threatened and there is a proper process and procedure for this, in addition to motu proprio action by government,” he explained.

“And by the way, did the laws and their IRRs specifically declare a two-year moratorium? If a safeguard petition has merit and warrants safeguard action, government should implement the provisions of law and not be selective or discriminatory in application,” he added.

Serrano questioned why the economic managers did not implement such moratorium on industrial safeguard actions invoked and imposed by the Department of Trade and Industry.

“So, where did this idea come from? What is the legal and even logical basis?” he said.

Rice Watch and Action Network (R1) Executive Director Hazel Tanchuling criticized Pernia for his statement and said his statement shows that economic planners “clearly lack foresight.” With Jasper Emmanuel Y. Arcalas