Halt to rice importation draws mixed reactions

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    Legal, better way. Farmers groups believe the special safeguard duty is a better solution since it is slapped between the harvest season which peaks between March and April.
    The Philippines will soon be the world's biggest rice importer. (Handout photo)

    President Duterte’s announcement on Tuesday that he was suspending rice importation during palay harvest season drew mixed reactions as it remains unclear how such plan would be implemented.

    Stakeholders are neither happy nor contented with this and other measures meant to relieve the “birth pains” of the Rice Tarrification Law (RTL).

    For them, it all boils down to how they can get reasonable price on local palay.

    Amid the confusion on the government’s current stand on the implementation of the RTL, agricultural lobby group Samahang Industriya ng Agrikultura (SINAG) said farmers need to get assurance they will get a fair price at the farmgate level.

    “We laud the statement of the President of buying all the local palay even if it means government loses (money). This should translate to more funds for the NFA (National Food Authority) to procure palay. NFA must procure them without condition and regardless of moisture content; especially in areas devastated by typhoons, monsoon floods and earthquakes at P19 per kilogram, just so our farmers will have something for their families this coming festive season,” said Rosendo So, SINAG chairman.

    But So said the government should review its policy of ensuring rice supply through imports in the long run because less than 10 percent of the global rice supply is tradeable.

    “With the floods and drought hitting rice-producing areas in Vietnam and India plus the increasing domestic rice demand in China; we may end up not having rice in the future.

    Any discussion on the prospect of the rice industry should look into the relatively thin world rice market and recently, the impacts of extreme weather situations as major considerations,” So added.

    The Philippine Chamber of Agriculture and Food Inc. (PCAFI) said the imposition of special safeguard duty (SSG) on rice imports should be pursued despite the President’s order to suspend rice importation.

    Danilo Fausto, PCAFI president, said the SSG must be imposed by January or February 2020 to ensure imports will not coincide with harvest by dry season in March to April 2020 in order to support farmgate price of palay to at least P17 per kg.

    “It takes 30 to 60 days to implement the law so it should be issued in January, February. A suspension is against the prevailing law on no QR (quantitative restriction),” he said in a statement.

    Based on Rule 6.1 of the RTL, the President upon the recommendation of the National Economic and Development Authority (NEDA) Board, as may be advised by the NFA Council, may increase, reduce, revise, or adjust existing rates of import duty up to the bound rate committed by the Philippines under the World Trade Organization Agreement on Agriculture and under the Asean Trade in Goods Agreement, including any necessary change in classification applicable to the importation of rice.

    The President can only adjust the tariffs when Congress is not in session.

    Rule 6.2. also of RTL provides that in the event of any imminent or forecasted shortage, or such other situation requiring government intervention, upon the recommendation of the NEDA Board, as may be advised by the NFA Council, the President is empowered for a limited period and/or a specified volume, to allow the importation at a lower applied tariff rate to address the situation. Such order shall take effect immediately and can only be issued when Congress is not in session.

    Fausto said SSG is a better solution since it is issued just for the harvest window and can be immediately lifted once harvest is finished. Such measure is also sanctioned by Section 10 of the RTL.

    The group also maintained the duty on imported rice should be 70 percent to match domestic produce.

    At rice’s world market price of $360 per metric ton, imported rice’s landed cost stands at P17 per kilo translating to P32 to P34 per kilo at retail.
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    “With imported price just matching domestic rice produce, traders will opt to rather defer importation as imports lose price advantage of the locals,” Fausto said.

    The President on Tuesday night said the government is suspending rice importation during palay harvest season to protect and help the local farmers who had been affected by the flooding of the market of imported grain.

    “Yes, because it is harvest time,” the President, in a press conference in Malacañang, when asked if it will order Agriculture Secretary William Dar to suspend rice importation.

    Duterte said his order was to buy all the locally harvested palay at the current farm gate prices even if the government does not profit from it.

    He could not give a timeframe on the purchases but said it would “take many days and weeks to” fill all government warehouses.

    He said he would only allow importation of rice to augment supply as he believes that the current harvest would not be able to supply all the rice needs of the public.

    Despite such pronouncement, Duterte reiterated that he cannot scrap the RTL because it is needed to fill the rice supply needs of the consumers and eventually fend off corruption.