RICE FARMERS lost P40 billion worth of income due to rice tariffication, to the benefit of importers and traders, who realized a P57.5 billion windfall during the first year of Republic Act No. 11203 or the Rice Tariffication Law, according to the Federation of Free Farmers (FFF).
According to a study conducted by the FFF and allied groups, farmer mainly absorbed the impact of low palay prices, whereas traders could shift their sourcing to imports.
The FFF said that two million tons of imported rice arrived during the first seven months of the law’s effectivity.
“Palay prices nosedived from an average of P22.04 per kilogram in September 2018 to P14.40 in October 2019,” the FFF said. Palay, or unmilled rice, is the form in which rice farmers sell their harvest, while imported rice is typically milled into various varieties.
Proponents of the law touted it as a means of bringing down prices, slowing inflation, and allowing poor consumers to buy the staple for less.
The FFF claimed that the promised drop in prices to benefit the poor was not realized.
“Importers brought in mostly higher quality rice that sold at a higher price and gave better profit margins. Up to 85% of total rice imports were of the 5% brokens grade instead of the cheaper 25% brokens that the National Food Authority (NFA) previously imported,” the FFF said.
The FFF also alleged that rice importers saved P2.5 billion in tariffs after not declaring the true value of their imports to the Bureau of Customs.
The Department of Agriculture (DA) had yet to comment on he study at deadline time.
Taking effect in March 2019, the law permitted unrestricted imports of rice, with Southeast Asian grain paying a tariff of 35%. The tariffs fund the Rice Competitiveness Enhancement Fund (RCEF), which helps farmers access seed, farm machinery, credit, and farm know-how. — Revin Mikhael D. Ochave