Press Release
September 17, 2018

Villar ensures rice tariffication bill includes enough support to help reduce rice prices, protect local farmers

Sen. Cynthia Villar said once passed into law, the bill liberalizing the importation of rice in the country will help reduce the price of rice and at the same time provide enough support for local farmers who will be affected by the influx of cheaper rice from abroad.

Villar, recognizing that the lifting of import quota will put local farmers at a disadvantage, made sure that measures are in place to protect farmers and to improve their productivity and competitiveness.

"I will not agree na mag-liberalize ang importation na walang tulong sa farmer kasi talo talaga tayo. Talo tayo ng Vietnam at Thailand in terms of competitiveness. So we have to help our farmers to be competitive as soon as possible. That's why we need additional funds and programs to help our farmers mechanize and ultimately lower the cost of producing palay," Villar said.

Villar, chairperson of the Committee on Agriculture and Food, sponsored the rice tariffication bill during Monday's Senate plenary session.

Senate Bill 1998 under Committee Report No. 440 replaces the quantitative import restriction on rice with tariffs and lifts the quantitative exports restrictions on rice. It amends Republic Act 8178 or the Agricultural Tariffication Act.

Under the bill, a 35 percent duty will be imposed on imports coming from Association of SouthEast Asian Nations (ASEAN) member states and 50 percent for non-ASEAN member states.

This measure has been certified as urgent by President Rodrigo Duterte and economic managers claimed that liberalizing rice imports will reduce the retail price of rice by P4 to P7 per kilo and reduce inflation rate by 0.4 percentage points.

"We are passing this bill not only to avert sanctions from the World Trade Organization. We are also seeing this as an opportunity to really push for a mechanized and modern way of farming, which will help us achieve our targets toward food security and self-sufficiency," Villar said.

A key feature of the bill is the creation of the Rice Competitiveness Enhancement Fund or the Rice Fund consisting of an initial appropriation of P10 billion sourced from the national budget until such time that there is enough collection from tariff and the rice production competitiveness in the Philippines has been achieved.

Funding for succeeding years will come from the tariff revenues for rice importation, estimated to reach P8 billion a year.The Rice Fund will be allocated and disbursed to rice producing areas, as follows:

a. 50 percent will be used as grant in kind to eligible farmers' associations and registered rice cooperatives and local government units, in the form of rice farm equipment such as tillers, tractors, seeders, threshers, rice planters, harvesters, irrigation pumps, small solar irrigation, reapers, driers, millers, and the like, for purposes of improving farm mechanization, to be implemented by the Philippine Center for Post-Harvest Development and Mechanization (PHILMECH);

b. 30 percent will be used for the development, propagation and promotion of inbred rice seeds to rice farmers and the organization of rice farmers into seed growers associations and/or cooperatives to engage in seed production and sale of improved seed varieties, to be implemented by the Philippine Rice Research Institute (PHILRICE);

c. 10 percent will be made available in the form of credit with minimal interest to rice farmers and cooperatives to be managed by Land Bank and the Development Bank of the Philippines;

d. 10 percent will be used for extension services divided between PHILMECH, PHILRICE, Agricultural Training Institute (ATI) and the Technical Education and Skills Development Authority to teach skills on rice crop production, modern rice farming techniques, seed production, farm mechanization, and knowledge/technology transfer thru farm schools nationwide.

Beneficiaries of the Rice Fund are farmers and farmworkers and their dependents listed in the Registry System for Basic Sectors in Agriculture which will be validated and updated by the Department of Agriculture, in consultation with farmers' cooperatives and organizations and local government units, within 180 days from the effectivity of the act.

The bill also mandates the completion of the Rice Industry Roadmap to restructure government's delivery of support services for the agricultural rice sector. This will be implemented to enhance sustainable investments in the rice industry and in support infrastructure and post-harvest facilities; improve farmers' productivity, efficiency and profitability, especially for small farmers and landless farmworkers; and strengthen research and development programs that will enhance resiliency of the rice industry.

The roadmap will also preserve and enhance the capacity of the future generation in rice production; provide technology-oriented, accessible and farmer specific support services that cover the whole value chain; and set up responsible and effective governance mechanisms.

Once enacted into law, the implementation of the National Single Window Program of the Bureau of Customs will also be mandated to curb smuggling.

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