PHL becoming ‘dumping ground’ for surpluses of other rice producers

FOREIGN RICE producers are using the Philippines as a “dumping ground” for their excess production, the Kilusang Magbubukid ng Pilipinas (KMP) said in a statement.

In a statement on Wednesday, the KMP said rice imports continue to weigh on domestic producers, keeping palay (unmilled rice) prices low and pushing many farmers into debt.

The KMP raised its concerns after the Philippine suspension on rice imports expired at the start of the year.

The KMP also raised the alarm after Pakistan signaled its intent to ship rice to the Philippines, joining major suppliers like Vietnam and Thailand.

“These trade initiatives highlight how the country, despite being majorly a rice producer, has been reduced to a dumping ground for surplus rice from exporting nations,” the KMP said.

“The government is passing the burden of the crisis onto the shoulders of farmers,” KMP Chairman Danilo H. Ramos was quoted as saying. “Instead of supporting local production and raising palay prices, the government continues to allow imported rice to flood the market, destroying the livelihoods of our farmers.”

The KMP said palay prices remain below production costs in several provinces, despite temporary price control measures and the import ban.

Mr. Ramos added that while imports aim to stabilize rice supply, they have consistently undermined incentives for domestic production.

The Department of Agriculture (DA) has said that it is considering importing rice from Pakistan to diversify sourcing and cut reliance on traditional suppliers, following a meeting with a Pakistan delegation.

KMP urged the government to reconsider its import-dependent rice policy and strengthen support for farmers, saying continued neglect could exacerbate rural poverty and threaten food security.

Separately, farmers continue to push for a fixed 35% duty on imported rice, saying the government’s flexible rice tariff scheme is designed to keep tariffs low.

“The starting point for any adjustment should be 35%, because the landed cost of imported rice has already dropped by 40% to 50%. The current scheme only serves to maintain the 15% tariff,” Jayson H. Cainglet, executive director of the Samahang Industriya ng Agrikultura, told BusinessWorld via Viber.

Under the implementing guidelines of Executive Order No. 105, rice imports are subject to a “flexible” tariff that rises or falls depending on the price of Vietnam 5% broken rice, the grade that accounts for most Philippine imports.

Tariff adjustments are made in five-percentage-point increments, with rates set at a minimum of 15% and a maximum of 35%.

Although the price of Vietnam 5% broken fell to around $360 per metric ton in December, the DA said the trigger price for a 20% tariff has not yet been reached.

Mr. Cainglet estimates that in July 2024, imported rice priced at $650 per metric ton under a 35% tariff would have had a landed cost of about P50.4 per kilo. By contrast, rice imported today at roughly $380 per metric ton under the 15% tariff has a landed cost of only P25.7 per kilo — a difference of P24.7.

He said the sharp decline in import costs has contributed to farmgate palay prices dropping from P18 to P21 per kilo to as low as P10 to P12 per kilo in some areas.

Mr. Cainglet added that the tariff reductions primarily benefit importers, while farmers bear the brunt of the policy and consumers see little improvement in retail prices.

“We cannot accept the claim that ‘market forces’ are driving rice prices. Farmers struggle while importers receive protection, and consumers have never truly benefited. Tariff reductions and consumer interest are just pretexts for higher profits for importers,” he said. — Vonn Andrei E. Villamiel