Unjustified tariff cut a stab in the back

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    The Federation of Free Farmers (FFF) described as unjustified and a stab in the back of rice growers a recommendation by the Department of Agriculture (DA) to reduce tariffs on rice imported from non-Asean countries to 35 percent.

    At present, rice imported from Asean is slapped a 35 percent tariff while rice sourced within the minimum access volume (MAV) of 350,000 metric tons (MT) from countries outside Asean is slapped 40 percent. A higher rate of 50 percent is imposed on rice outside the quota.

    FFF said this proposal runs counter to DA’s repeated assurance the country has ample supply of rice following a record harvest last year despite the series of typhoons and calamities and the suspension of the issuance of import clearances.

    The Tariff Commission (TC) will hear the proposal this week.

    “This sudden proposal of the DA is totally unjustified. It is a stab in the back of our rice farmers who are still reeling from the drastic fall in farmgate prices caused by excessive imports in the last two years following the enactment of the Rice Tariffication Law. Why encourage more and cheaper imports now when local supply is more than enough and prices are very stable?” said Raul Montemayor, FFF national manager.

    Montemayor said imports from countries like India and Pakistan are still cheaper than comparable products from Asean countries like Vietnam and Thailand even if they are assessed a higher 50- percent tariff.

    He added there is no guarantee reduced import costs on rice from non-Asean countries will translate to lower retail prices for consumers.

    “The DA proposal will only make the importers richer. Those who will now import from India and Pakistan to avail of the lower prices and tariff are also the ones who used to import from Thailand and Vietnam. They will sell the rice at the highest possible price and will not pass on most of the savings to consumers,” Montemayor said.

    Citing data from the Philippine Statistics Authority, FFF said the average retail prices for both well-milled rice (WMR) and regular-milled rice (RMR) last year were 2.5 percent lower than 2019 levels.

    The group said from July 2020, prices were on a continuous downtrend and reached their lowest level of P40.75 per kilo for WMR and P36.09 per kilo for RMR in December 2020.

    This, despite increases in international prices \ Montemayor said farmers were not consulted on the proposal which he surmised could have just been inserted into the petition to reduce tariffs for pork products.

    The DA has proposed for the TC to consider lowering the tariff of pork within the MAV to five percent in the first six months and to 10 percent in the suceeding six months from the current 30 percent.

    It recommended for the tariff of pork outside MAV to be lowered to 15 percent in the first six months and 20 percent in the succeeding six months from the current 40 percent.

    The current MAV for pork is at 54,000 MT but is being considered by the DA to be tripled in order to escalate the local supply of pork and stabilize prices.