The Philippines, at last, is finding the solution to rice shortage and higher prices. President Rodrigo Duterte in his third State of the Nation Address Monday asked Congress to consider as urgent the passage of the law amending the Agricultural Tariffication Act of 1996 to stabilize rice prices and address the artificial shortage.
The amendment to the law essentially calls for a straight high tariff or duty on rice imports, instead of non-tariff barriers that also make inbound shipments costlier. Market forces eventually will decide on the price of imported rice. With more importers competing for the Philippine demand, the cost of imported rice will soon settle down and offset the high tariff.
The National Economic and Development Authority renewed its call to Congress to pass the Rice Tariffication bill, saying it will help temper inflation and improve the agriculture sector.
“There is no time to waste. All of us must rally behind the administration’s reform agenda, most especially the Rice Tariffication bill, which if implemented will make our agriculture sector competitive in the long-term,” Economic Planning Secretary Ernesto Pernia said.
The government’s chief economist predicted that once the Rice Tariffication bill filed before the 17th Congress was signed into law and fully implemented, the prices of rice would likely go down. A preliminary estimate by Neda showed that headline inflation rate would be reduced by one percentage point if the domestic wholesale rice market lowered its price to the level of the imported rice.
The Department of Finance earlier said the lifting of the quantitative restrictions on rice imports in favor of a 35-percent import tariff would result in the reduction in the retail price of the food staple by as much as P7 a kilo and help free some 730,000 Filipinos from poverty.
President Duterte has strongly supported the rice bill, issuing a stern warning against “rice hoarders, cartels and their protectors” who were manipulating the prices of the commodity to their advantage and to the detriment of the Filipino people.
Thailand and Vietnam, the two major exporters of rice in Southeast Asia, have learned their lessons after experiencing shortages in the past. Cheap rice imports forced their farmers to be competitive through modern agriculture. Filipino farmers, with government assistance, must adapt to the market forces and find ways to increase their rice production.
