Rice liberalization to help GDP rise
Credit to Author: ANNA LEAH E. GONZALES| Date: Thu, 04 Jul 2019 16:21:38 +0000
THE liberalization of rice imports would have a positive impact on the Philippine economy, the preliminary results of a study by the National Economic and Development Authority (NEDA) and the International Food Policy Research Institute (Ifpri) showed.
In a statement on Thursday, NEDA said that “under [the] 35-percent tariff rate, [the country’s] GDP (gross domestic product) would improve by 0.44 percentage points,” adding that “[t]he agriculture sector would expand as there would be more crop diversification — as uncompetitive rice areas shift to other high-value crops with relatively higher net returns.”
The study results came almost five months after the signing into law of Republic Act 11203 or the Rice Liberation Act. This law replaced the system of quantitative restrictions on rice imports with a purely tariff-based one as part of the government’s efforts to ensure that the country has sufficient rice supply at relatively lower prices.
RA 11203 also mandates the creation of a Rice Comprehensive Enhancement Fund that provides P10 billion annually for six years to ensure that duties collected from rice imports would help local farmers.
“Before the rice tariffication law was passed, the government had been monopolizing the rice trade. This setup had been restricting the flow of private funds going to the sector,” NEDA Undersecretary for Policy and Planning Rosemarie G. Edillon said.
According to her, rice liberalization would positively impact the agriculture sector and the country’s economy in the coming years.
“We have conducted similar studies on this. But we want a model that integrates climate change into farmers’ decisions,” she said.
NEDA said that, with rice tariffication in place, increasing investments in research and development in agriculture and investing in irrigation, among others, can increase rice yields and farm productivity in the long run.
The study also cited the need to support local rice farmers by helping them improve productivity, providing cash transfers in the short run, and assisting them in the adoption of climate-resilient technologies.
“The agriculture sector, particularly the rice sector, is vulnerable to climate shocks, which have been increasing in frequency and intensity. So we want to be prepared and provide interventions ahead of time,” Edillon said.
NEDA and Ifpri will consolidate inputs and recommendations from agriculture stakeholders before releasing a policy note containing the official results and recommendations.
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