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Rice tariffication deprived farmers of P27.1B in revenue but gave consumers cheaper rice — BSP

rice tariffication deprived farmers of p27 1b in revenue but gave consumers cheaper rice bsp - Rice tariffication deprived farmers of P27.1B in revenue but gave consumers cheaper rice — BSP

RICE TARIFFICATION took away from farmers P27.1 billion in revenue, with the trade-off being cheaper rice for consumers, the Bangko Sentral ng Pilipinas (BSP) said, citing the results of a study.

The BSP working paper is known as “Deregulation and Tariffication At Last: The Saga of the Rice Sector Reform in the Philippines.”

“Farmers have not experienced the liberalized policy regime in full, and the production side of the rice industry has not had a chance to adjust to the new regime,” it said, referring to a component of the law requiring the funding of measures to make farmers more competitive.

It said the law, also known as Republic Act 11203, was passed in March 2019.

“Recognizing the adjustment difficulties among farmers, the Philippine government is now implementing catch-up adjustment and transition support measures for the most badly-affected farmers, including cash payments, highly-subsidized loans, and grants of seed, farm machinery, and training support,” it said.

The paper cited data from the Department of Finance indicating that the farmer income losses from the lower price of palay, or unmilled rice — the form in which they sell their grain to traders — was P27.1 billion between April 2019 and February 2020. These losses were not offset by the gains they reaped from lower consumer prices overall and a decline in inflation, estimated at P4.2 billion.

“The losers due to rice tariffication appear to be the rice farmers. Farmgate prices for fresh and unmilled palay have fallen significantly, and have fallen faster and deeper than milled rice prices,” it said.

“So far, the clearest gainers are Filipino consumers, who are now experiencing lower domestic rice prices,” it said.

Tariffs collected from rice imports totaled P12.1 billion in 2019, according to the Bureau of Customs.

Some P10 billion worth of tariffs each year will finance the Rice Competitiveness Enhancement Fund.

The paper said the agriculture industry will take time to adjust to the law.

“It will take a year or two — two to four planting cycles, for the transition in trade to be substantially in place,” it said. — Luz Wendy T. Noble

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