Press Release
November 14, 2018

'Gov't should not profit from rice tarrification, 100% of duties to be plowed back to farmers'

Senate President Pro Tempore Ralph Recto today said that the Senate bill on rice tariffication mandates that all duties collected from imported rice be plowed back to farmers through "a raft of assistance in the form of equipment, insurance, credit, and even direct financial aid."

The Senate position is that government should not profit from rice tariffication, Recto said.

He revealed that some quarters in the government were toying with the idea of using rice tariffication to "shore up the government's fiscal position."

"But rice tariffication is not a revenue measure. By stipulating in the bill that 100 percent of duties will be plowed back to farmers, we are sending a strong message to those who might be tempted to use it to primarily raise taxes that their idea is dead in the water," Recto said.

Recto said there was a proposal from an agency in the government's economic cluster to limit plowbacks to P10 billion a year "even if duties collected from imported rice are double or triple that amount."

One proposal, which the Senate rejected, is that the annual funding for the Rice Competitive Enhancement Fund (RCEF), which shall be sourced by rice duties, shall be capped at P10 billion, and all excess collections will effectively be booked as national income, Recto said.

"Unfair naman 'yan. Kung halimbawa P25 billion ang collection, ibig sabihin mas malaki pa ang share ng pamahalaan kaysa sa mga magsasakang maapektuhan? Farmers get the pain and government gets the gain?" Recto said.

He said government think-tank Philippine Institute for Development Studies projected government revenues from rice tariffs would range from P13.9 billion to P27.7 billion next year.

In last night's period of amendments on the rice tariffication bill, the Senate agreed on setting the RCEF at a minimum P10 billion a year for six years, and tariff revenues in excess of P10 billion shall be appropriated by Congress based on a menu of programs in the rice tariffication law.

"The result is a 100-percent plowback rate. Everything will be returned to the farmers. They will get all the dividends to compensate for their losses, which I think will never be enough," he said.

"Duties will be spent to cover their losses, improve their productivity and not to plug the budget deficit," Recto said.

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