Marcos trashes proposed ‘rice tariff reduction’

MANILA - President Ferdinand Marcos Jr. flatly rejected a proposal to temporarily implement rice tariff reduction in a bid to address the surge of rice prices in the market.

“We decided with the agriculture and economic managers that … It was not the right time to lower the tariff rates because the projection of world rice prices is that it will go down. So, this is not the right time to lower tariffs. Tariffs are generally lowered when the price is going up,” Marcos said.

The President made the remarks shortly following the recent sectoral meeting in Malacañang where the National Economic and Development Authority presented updates on the proposed rice tariff reduction with inputs from the Department of Finance, Department of Trade and Industry and the Department of Budget and Management.

Farmer groups have raised concern over some negative effects should rice tariff reduction be adopted such as that importers would mostly stand to gain with the proposal because they are already undervaluing rice and will only further depress palay prices and discourage farmers from expanding their future production.

The NEDA earlier recommended a reduction in the tariff imposed on imported rice in a bid to help lower local rice prices in the market, which will eventually lead to the simultaneous lifting of Executive Order (EO) No. 39, imposing the mandated price ceilings on regular and well-milled rice in the market.

However during the meeting, NEDA Secretary Arsenio Balisacan and Agriculture officials namely Undersecretaries Leocadio Sebastian and Mercedita Sombilla agreed that it was not the right lower tariff rates because of the downtrend of rice prices in the world market.

Under EO 39, which took effect on September 5, the mandated price ceiling on regular rice is at P41.00 per kilogram while the mandated price cap on well-milled rice is at P45.00 per kilogram. But the rice cap (EO 39) is not being followed by rice retailers who continue to sell the grains as much as P60 a kilo.

Asked if the government will lift the implementation of EO 39, Marcos said it will remain in effect as they have to study the matter carefully. “Pag-aralan natin mabuti,” he said.

The government has imposed the Rice Tariffication Act which amends the Agricultural Tariffication Act of 1996 (RA 8178). The law replaces the system of quantitative restriction on rice importation with a purely tariff system. But the effects of rice tariffication on household welfare occur through prices. The reform leads to lower domestic rice prices, resulting in reduced income for rice farmers but increased purchasing power for rice consumers. (Mindanao Examiner)