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By Luisa Maria Jacinta C. Jocson, Senior Journalist
MILAN, Italy — The administration is amenable to implementing a seasonal tariff system for rice imports to enhance protection for farmers.
“Indeed, we will need to analyze it. I would contend that if there are no operational or even legal barriers to it, I would support it. This way, we can ensure stability in farmers’ incomes and the prices that farmers receive,” Department of Economy, Planning, and Development Secretary Arsenio M. Balisacan informed BusinessWorld during the Asian Development Bank Annual Meeting held here last week.
This follows the Federation of Free Farmers (FFF) advocating for the imposition of levies that are strategically scheduled to avoid conflicting with peak harvest times. Seasonal tariffs would signify fluctuating instead of constant duties.
Since July of last year, the administration reduced tariffs on rice imports to 15% from 35% until 2028 to control rising prices.
Mr. Balisacan remarked that the administration would need to consider how to execute seasonal tariffs, noting that these were once a key tool for the European Union and the United States before the World Trade Organization (WTO) came into existence.
“At present, we need to determine how to navigate that, as who is adhering to WTO standards at this moment? Everyone is adjusting tariffs in different ways, so we must discover a method to analyze this.”
A seasonal tariff will protect farmers from the effects of fluctuating prices, he further stated.
“What you are effectively doing is setting a price that you would prefer farmers to encounter. When global prices decrease, you elevate the tariff to maintain the price. Conversely, when global prices surge drastically, you lower the tariff. In essence, you are stabilizing the price faced by farmers. So that’s advantageous,” Mr. Balisacan elaborated.
In recent months, rice inflation has been declining following the government’s introduction of various initiatives to control the retail prices of this staple food.
Aside from reduced tariffs, it also declared a food security emergency concerning rice in February, permitting the release of reserve stocks. Earlier this year, the Agriculture department also enforced a maximum suggested retail price on rice.
In April, rice inflation further eased to 10.9%, down from a 7.7% reduction in March.
Data from the Philippine Statistics Authority indicated that the average price of a kilogram of regular milled rice nationwide dropped by 13.3% year on year to P44.45 in April. Average prices of well-milled rice fell by 10.4% to P50.54, while special rice declined by 6.2% to P60.69.
Nonetheless, farmers’ groups have expressed that rice prices still remain high in many local markets.
The Committee on Tariff and Related Matters (CTRM) is currently reviewing the proposal to enforce seasonal levies, Mr. Balisacan shared.
“From there, they will recommend it to the CTRM Cabinet, and it will then be escalated to the Economy and Development Council, previously known as the National Economic and Development Authority Board.”
Groups such as FFF and Samahang Industriya ng Agrikultura have also put forth suggestions to revert the rice tariff back to 35%.
In the meantime, the Department of Agriculture (DA) stated it is also open to examining seasonal tariffs pending further investigation.
“Conceptually, we are open to the notion and willing to explore various ideas,” Agriculture Undersecretary Asis G. Perez informed BusinessWorld during the same occasion. “However, we must find methods to implement it and ensure that when executed seasonally, it does not lead to uncertainty and unpredictability.”
“As for the notion itself, we remain open to considering the proposal. The DA is always receptive. We do not dismiss an idea.”
Mr. Perez stated that their policies must aim to “eliminate unpredictability” in food supply, which influences prices.
“This is to secure consistency and predictability, which are, I believe, essential components for a robust food supply system. Not just for rice, but for any other product as well,” he added.
In January, the DA anticipated that the palay or unmilled rice harvest would exceed 20 million metric tons (MT) this year. However, in 2024, palay output is projected to fall to a four-year low of 19.09 million MT, a decline of 4.84% compared to the previous year.
Rice imports are likely to decrease by 1.9% to 5.2 million MT this year, according to the US Department of Agriculture. In 2024, rice imports reached a record 4.7 million MT.
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