'Unli' rice imports
Brushing aside a last-minute appeal from local rice producers, President Duterte has signed a law lifting quantitative import restrictions on rice.
The rice tariffication law was crafted amid the surge in rice prices last year, which was attributed to official infighting that led to the near-depletion of subsidized rice from the National Food Authority. To bring down rice prices, the government decided to flood the market with imports.
Consumers welcomed the promise of cheaper rice prices, but unlimited rice importation was bad news for local rice farmers. In response to concerns that the “unli” rice importation would kill local rice production, the tariffication law provides for the creation of a Rice Competitiveness Enhancement Fund, to be drawn from the import fees and used to provide various forms of assistance to local rice farmers.
Obviously, the success of the assistance scheme hinges on the efficient and honest management of the common fund, which will have an initial annual funding of P10 billion. Unfortunately, the country has a disappointing record in handling such funds. There are valid concerns that the common fund will go the way of the fertilizer funds and Road User’s Tax – in the pockets of thieves in government rather than used for the purpose specified in the law.
Local rice production is suffering enough from the lack of interest among youths to make farming their life’s calling. The flood of rice imports could add to the disincentives and make the Philippines heavily dependent on other countries for its staple.
The rice tariffication law has two principal goals: to bring down rice prices and tame food inflation, and to boost local rice production. Every effort must be made to ensure that the achievement of one goal will not be at the expense of the other. With rice tariffication in place, authorities must see to it that the worst fears of local rice farmers will not materialize.