SEARCA experts share Rice Tariffication perspective

by Brenda Jocson, 26 Dec 2019

Los Baños, Laguna―Diverse perspectives on the Rice Tariffication Law emerged at the session on regional implication of the Philippine RTL.

The session was convened by the Southeast Asian Regional Center for Graduate Study and Research in Agriculture during the recently held Inaugural Rice Research Symposium of the World Rice Conference organized by The Rice Trader.

Republic Act 11203 or RTL was recently passed with the purpose of lifting existing quantitative import restrictions on rice. It has amassed mixed reactions from various stakeholders of the local rice industry, raising the question as to whether it is indeed beneficial for the Philippine rice industry.

According to Searca, this is so because of the current influx of imported rice and the consequent plunge in domestic farmgate prices, nonetheless, the current push for the establishment of an ASEAN common market has steered regional strategies toward promoting and strengthening intra-ASEAN trade and market integration.

The SEARCA forum sought to assess the policy implications on regional trade, rice reserves, food security, agriculture and rural development, and rice farmers’ income and competitiveness in relation to the implementation of the RTL.

Dr. Glenn B. Gregorio, SEARCA director, said that the medium by which people are informed about the RTL is also of crucial importance to ensure that stakeholders are given the proper information about the law.

“[Thus] there is that need to discuss and determine the right price and the right rice,” Dr. Gregorio said.

The Philippine Institute for Development Studies has provided an overview of the immediate aftermath and potential long-term impact of rice industry liberalization in the Philippines.

Dr. Roehlano M. Briones, Senior Research Fellow at the PIDS, said that despite the immediate decline in farmgate and retail prices of rice, the implementation of the RTL or liberalization of the industry, in the long-term, can benefit the society as a whole.

In terms of regional trade, the UP School of Economics said: “With the liberalization of rice import policies in the Philippines, we can possibly experience an increase of around 10% in rice imports for local consumption.”

Dr. Ramon L. Clarete, UPSE Professor, explained that the expected boost in productivity and efficiency in rice farming (i.e., milling and logistics) will encourage modernization and farm aggregation as part of the productivity effect of import liberalization.

“We raise the average productivity of the industry and its value chain by getting rid of the marginal producers on which for a long time the quantitative restrictions has been designed to protect,” Dr. Clarete said.

Nonetheless, Dr. Clarete clarified that the marginal producers can still be part of the industry as the farm can actually boost its productivity if it joins an alliance of several others and get their aggregated farm managed professionally.

An associate research fellow from Nanyang Technological University of Singapore claimed that climate change and the failure of rice production systems to upgrade or adapt has caused a sudden reversal of the state of undernourishment in the region.

Describing food security in Southeast Asia as a U-shaped “love-hate relationship, Jose Ma. Luis P. Montesclaros of NTU cited that the lack of exposure to trade competition in markets, caused by quantitative restrictions such as the import quotas, has prevented rice production systems to upgrade and adapt.

He explained that for the rest of the region, the Philippines’ opening up to more rice imports may cause international demand to expand faster than supply (short or medium-run), harming the growing number of urban consumers in rice-importing and -exporting countries.