Ex-technocrats push Duterte to sign rice tariffication bill

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rice farmers

THE Foundation for Economic Freedom (FEF) urged President Rodrigo R. Duterte to sign the rice tariffication bill to help resolve various issues afflicting the rice industry, including smuggling, uncompetitive production costs, and corruption.

“We, the Foundation for Economic Freedom, urge President Duterte to sign the bill on rice tariffication immediately. The bill… will be the most far-reaching reform in the history of rice policy. For decades, the interventionist strategy has been tried, tested, and has repeatedly failed,” the FEF said in a statement issued on Monday.

The FEF’s members consist of retired technocrats. Its chairman is former Finance Secretary Roberto F. de Ocampo.

Business groups also made a similar call to the President in January.

The rice tariffication bill has been passed by both chambers of Congress — Aug. 13 in the House of Representatives and Nov. 14 in the Senate. It was transmitted to Malacañang on Jan. 15. It is expected to lapse into law by Feb. 17 unless signed or vetoed by the President.

The bill amends Republic Act No. 8178 or the Agricultural Tariffication Act, removing the government from the role of importing rice and allowing the staple to be imported more freely by the private sector while implementing a minimum tariff rate of 35% for rice shipped in from elsewhere in Southeast Asia.

The legislation proposes a 35% duty on imports from within the Association of Southeast Asian Nations (ASEAN) and higher rates for imports from non-ASEAN countries.

The FEF said the proposed measure would solve the root cause of the problems besetting the rice industry, which they said was “unwarranted government intervention.”

“By liberalizing the industry the syndicate controlling the value chain will now be nullified by free entry and competition — including entry and competition from foreign rice suppliers,” the group said.

“By leaving trading and storage in the hands of traders, competing actively in a free market, investors can best judge when to buy low and sell high — curing the problem of gluts during harvest, and releasing stocks during lean periods,” they added.

FEF also allayed concerns of those who are against the bill, saying that the proposed measure has put in place safeguards to manage the effects of the new tariffication system.

The Federation of Free Farmers (FFF) has warned that the government will be left “practically powerless” when rice prices turn volatile with the passage of the rice tariffication bill, because it removes the National Food Authority’s (NFA) importing role and restricts it to maintaining a minimum rice inventory.

FEF said the proposed tariff rates would afford protection for the industry and the proposed rice competitiveness fund of P10 billion offers safety nets for farmers.

The FEF also noted that the task of dealing with anti-competitive practices will be left to the Philippine Competition Commission (PCC).

“The time for timid half-measures is over. It is now time for bold and confident steps. Change is coming for the rice industry, Mr. President. The sooner you make it happen, the better,” the FEF said.

Malacañang said last week that the signing of the measure is “forthcoming.”

Agriculture Secretary Emmanuel F. Piñol on the other hand has said that Mr. Duterte is open to changes to the bill following concerns raised by farmers.

The government’s economic team has also noted that they are preparing for a “quick and smooth transition” to the new import tariff regime with the expected enactment of the bill. The bill is touted as among the measures that will help reduce inflation, which hit 4.4% in January. — Camille A. Aguinaldo