MANILA, Philippines — President Marcos must raise the tariff on imported rice soon to safeguard farmers’ income and prevent further ballooning of their losses that an industry group has estimated to have reached over P54 billion due to falling palay prices.
Industry groups present during the third periodic review of the 15 percent rice tariff recently were unanimous in proposing an immediate tariff hike, citing continuous decline in farmgate prices and income of farmers.
“We are urging the President to raise the rice tariff now, otherwise if we will wait the next review period in November, it will be too late for our palay farmers,” former agriculture secretary Leonardo Montemayor told The STAR.
Montemayor was present during the tariff review meeting last July 30, representing the Federation of Free Farmers (FFF). Three other industry groups and players were present in the meeting and supported the increase in rice tariff.
Montemayor said palay prices would continue to freefall come the wet harvest season, which begins in September, that would lead to even lower profit for farmers.
FFF estimated that rice farmers have lost around P54.5 billion in the first half as a result of the P6 per kilo average drop in palay prices on an annual basis.
The group attributed the drop in palay prices to a glut in supply caused by the high carryover rice stocks, coupled by substantial import volume during the six-month period encouraged by the lower tariff rate.
The sale of subsidized rice by the government at P20 per kilo also influenced traders to lower their palay buying prices to compete with the subsidized rice sold in the market, FFF said.
However, the Department of Agriculture (DA) earlier dismissed claims that the P20 per kilo rice is contributing to the drop in palay prices, arguing that it only accounts for a small market share and they were bought at higher palay prices.
Montemayor said it would take “strong” political will from Marcos to adjust the rice tariff rate since Congress is still in session.
Any tariff adjustments must undergo Congressional approval since the mandate on all tariff-related matters are vestowed upon Congress.
The President can only exercise his power to directly adjust tariffs when Congress is not in session.
The Department of Economy, Planning and Development, which led the tariff review, will submit soonest to President Marcos the outcome of the periodic review for his consideration.
“We told DEPDev to inform President Marcos about the urgency of the issue,” Montemayor said.
The STAR earlier reported that the DA is already pushing for the immediate increase of the rice tariff rate whether on a staggered basis or reverted fully to its original rate of 35 percent.
Agriculture Secretary Francisco Tiu Laurel Jr. said it is urgent to increase the rice tariff already to help lift local palay prices without rocking the retail market since market conditions remain favorable.
The rice tariff was slashed by the Marcos administration to tame rising prices of the commodity last year.
Rice prices deflated in June by 14.3 percent compared to the 22.5 percent inflation posted in the same month last year, official statistics showed.
Industry sources said that this is now the right time for the government to hike the rice tariff since global rice prices are on a downward trend due to ample world supply coupled by slowdown in demand from key importing countries.
For example, the average price of five percent broken Vietnam rice – the country’s most imported variety – in the first half fell by 32 percent year-on-year to $393.9 per metric ton, based on monitoring of the United Nations’ Food and Agriculture Organization.
Furthermore, the rice tariff hike must be implemented soon to ensure that farmers will have a higher level of protection once they begin harvesting in September since import clearances are valid for two months, a ranking official told The STAR.
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