Experts bare differing perspectives on Rice Tariffication Law

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Diverse perspectives on the Rice Tariffication Law (RTL) emerged at the session on regional implication of the Philippine RTL convened by the Southeast Asian Regional Center for Graduate Study and Research in Agriculture (SEARCA) during the Inaugural Rice Research Symposium of the World Rice Conference (WRC) organized by the The Rice Trader (TRT) last month.

The RTL (Republic Act 11203) was recently passed with the purpose of lifting existing quantitative import restrictions on rice.

With the current influx of imported rice and the consequent plunge in domestic farmgate prices, the RTL 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. 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.

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

Dr. Gregorio also emphasized the need to discuss and determine the “right price and the right rice.”

Dr. Roehlano M. Briones, Senior Research Fellow at the Philippine Institute for Development Studies (PIDS), provided an overview of the immediate aftermath and potential long-term impact of rice industry liberalization in the Philippines. He 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, Dr. Ramon L. Clarete, Professor at the UP School of Economics (UPSE), 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.”

He 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.

A U-shaped “love-hate relationship” is how Mr. Jose Ma. Luis P. Montesclaros described food security in Southeast Asia. The 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.

In addition, he cited 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.

Mr. Montesclaros 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.

The RTL’s implications on regional rice reserves were discussed by Ms. Jansinee Kankaew, Head of Implementation of the ASEAN Plus Three Emergency Rice Reserves (APTERR) Secretariat. According to Ms. Kankaew, the RTL has significantly affected the operations of the National Food Authority (NFA), which is APTERR’s counterpart in the Philippines. With NFA losing its importing capacity, the implementation of the APTERR Tier 1 Programme between the Philippines and Japan might be at risk.

She qualified however that it is too soon to identify impacts of the RTL to the APTERR activities. She said the APTERR Secretariat and the NFA have continued to work closely to ensure that the APTERR activities can be implemented smoothly and effectively in the future.

Mr. Jerry E. Pacturan, the Country Programme Officer for the Philippines and Myanmar of the International Fund for Agricultural Development (IFAD), shared his views from the development sector. Looking at the broader perspective of selected ASEAN countries, he stressed that rapid rural transformation is indeed happening in the region. In support of the implementation of the RTL, he claimed that the positive implications of the RTL as indeed for the benefit of the country.

Mr. Pacturan said that with the tariffication, resources must be used to support increasing productivity, farm consolidation, and mechanization in the rice sector.

He added that with a more responsive strategy for the rice industry, the government will be able to refocus its resources toward the diversification of the agricultural sector and provide equal attention to other high-value crops with competitive advantage.

To voice out the sentiments of the local farmers, Mr. Cresente C. Paez, Director of the Cooperative Development Program of the Asian Farmers Association for Sustainable Rural Development (AFA), warned about the impacts of the RTL to farmers if the law is not properly calibrated.

He said that the issues and challenges that farmers face every cropping season in relation to market and environmental risks, market power, and governance, were not addressed head-on in the RTL.

Moreover, he expressed his belief that the law itself is defective as the safeguards or safety nets for the protection of the farmers and consuming public were not taken into account concretely and strongly. “A lot is said about promises, not guarantee of protection,” he said.

Dr. Briones said that at the regional level, although the Philippines may become the world’s biggest rice importer soon, it will not be much of a shock to the world rice market as during that of the 2008 crisis.

“The discussions on the regional implications of the RTL appears to be more on the long-term. If other countries would follow the same step that the Philippines took with the liberalization of its rice industry and open up rice trade, then rice supply may be secured for the region in the foreseeable future,” Dr. Briones said. (SEARCA)

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