Tariff rollout hurts PH rice millers
Credit to Author: EIREENE JAIREE GOMEZ| Date: Mon, 29 Jul 2019 16:19:51 +0000
About 40 percent of the total 10,000 big and small rice-milling operations in the country have stopped their operations after experiencing the negative impacts of the implementation of a new rice regime including the tremendous decrease in the price of locally-produced palay or unhusked rice, the industry said.
Such milling facilities were those located in major rice-producing provinces like Nueva Ecija, Isabela, Mindoro and Panay Islands, Joji Co, president of the Philippine Confederation of Grains Associations, said at the sidelines of the launching of “Masaganang Ani 300” and “Support Local Farmers” on Monday in Quezon City.
Co explained that rice millers were forced to stop their operations since they bought palay during the last wet season harvest at much higher price. Because of this, they could not sell their milled rice at a competitive price against the cheap imported rice coming in.
While about 60 percent to 70 percent of rice milling facilities are still operating, rice supply of such businesses are those which have been imported following the rollout of the Republic Act 11203 or Rice Tariffication Law, he said.
“[In] intercity in Bocaue Bulacan, 80 to 90 percent of those rice mills are now milling but their stocks of rice, where do they come from? Importation,” Co said, noting that about 150 rice milling facilities have reportedly stopped their operations.
Since the passage of the new law in February this year, more than 1.5 million tons of imported rice have already entered the country, according to the Bureau of Customs.
To address the problem on rice smuggling, which have been a trade issue in the country for decades, Co said the government should “enforce strictly the customs law.”
Just last two weeks, authorities seized 10,000 sacks of smuggled rice worth P12 million near an island off Basilan. In November last year, the Philippine Coast Guard also intercepted a vessel containing about 50,000 bags of smuggled rice in Tonquil, Sulu.
Co also expressed support on the calls to review RA 11203 and joined the Philippine Chamber of Agriculture and Food, Inc.’s (PCAFI) push for the government to start increasing the tariff on imported rice entering the country, in a bid to help plummeting prices of palay to recover from a steep drop to as low as P12 per kilo in some provinces.
“[But] what is more important is not the safeguard on the duty. [It] is the strict implementation on the customs laws,” he noted.
Under RA 11203, a special safeguard duty on rice may be put put in place to protect the rice industry from sudden or extreme price fluctuations.
A safeguard duty is a temporary increase in import duty of an agricultural product to deal with import surges or price falls, under the World Trade Agreement (WTO) on Agriculture.
The Rice Tariffication Act has allowed private traders to apply for unlimited importations of rice as long as they secure the necessary permits and pay the proper duties, set at 35 percent for rice sourced from ASEAN countries. A 40-percent tariff shall be levied on shipments sourced from non-Asean countries within the minimum access volume of 350,000 MT, going up to 180 percent for out-quota imports.
The law stipulates that through the P10-billion Rice Competitive Rice Fund (RCEF), the Department of Agriculture (DA) through the Philippine Center for Postharvest Development and Mechanization (PHilMech) will provide farmers with machinery and equipment worth P5 billion, free high-yielding seeds worth P3 billion from Philippine Rice Research Institute (PhilRice), P1 billion for credit and P1 billion in training through the Agricultural Training Institute.