Senate transmits rice tariffication measure to OP

A measure that will allow unimpeded importation of rice, amending the Agricultural Tariffication Act of 1996 and replacing the quantitative restriction on rice imports, is now a President's signature away to become a law.

The Senate on Tuesday (January 15) transmitted to the Office of the President the harmonized version of Senate Bill 1998 and House Bill 7735, or an "Act Replacing the Quantitative Import Restrictions on Rice with Tariffs, Lifting the Quantitative Export Restrictions."

The measure, which was ratified by both Houses of Congress in November last year, would lapse into law if the President failed to act on it after 30 days.

President Rodrigo Duterte's economic managers have identified rice tariffication as one of the means that would help address soaring inflation.

The measure would create the Rice Competitiveness Enhancement Fund (RCEF) as a special rice safeguard duty to protect the rice industry from sudden or extreme price fluctuations.

"One of the key features of the bill is the creation of the Rice Competitiveness Enhancement Fund, which shall consist of initial appropriation of P10 billion a year until all duties collected from the importation of rice can replace it," said Sen. Cynthia Villar, sponsor and principal author of the 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 fund will be utilized to provide different forms of assistance to the country's rice farmers such as the development of inbred rice seeds for our farmers, the development of rice farm equipment and skills enhancement.

Villar noted that the staple grain is the only agricultural commodity in the country that has a quantitative restriction (QR), limiting the inflow of imported rice in the country.

This would in effect remove all unnecessary intervention of the government in the rice market, as recently announced by Duterte, Villar said.

Under the measure, the tariff equivalent of the QR on imported rice will be notified by the Philippines to the World Trade Organization (WTO) as follows:

1. For the minimum access volume (MAV) committed by the Philippines to WTO, the indicated rates in the applicable provisions of the WTO agreement on agriculture, shall apply;

2. For ASEAN member states, thirty-five percent (35%) or the import duty rate commitment of the Philippines for rice importation, pursuant to the ASEAN Trade in Goods Agreement or ATIGA; and,

3. For non-ASEAN member states, fifty percent (50%) or the tariff equivalent calculated in accordance with the WTO agreement on agriculture upon the expiration of the waiver relating to the special treatment for rice of the Philippines, whichever is higher. Under the measure, the RCEF shall be allocated and disbursed to rice-producing areas, as follows:

Fifty percent (50%) shall be utilized as grant in aid to eligible farmers associations, and registered rice cooperatives and LGUs, in the form of rice farm equipment for purposes of improving farm mechanization. The machines are tillers, tractors, seeders, millers, dryers and the like. It will be implemented by the Philippine Center for PostHarvest Mechanization and Development (Philmech);

Thirty percent (30%) shall be used for the development, propagation and promotion of inbred rice seeds to rice farmers.

Ten percent (10%) shall be made available in the form of credit with minimal interest to rice farmers and cooperatives to be managed equally by Land Bank and the Development Bank of the Philippines;

Another ten percent (10%) of the fund shall be for the extension services divided between Philmech, Philippine Rice Research Institute (PhilRice), Agricultural Training Institute (ATI) and TESDA to teach skills on rice crop production, modern rice farming techniques, seed production, farm mechanization, and knowledge/technology transfer thru farm schools nationwide.