Rice Tarrification Law: Beneficial to Consumers and A Burden to Farmers

Juanga, Mark Matthew V. & Sagun, Erica Grace B.

Agricultural policies by of the Philippine government had always revolved around the rice

sector, each policy always ensures to provide high supply of rice, producing big salary to farmers

while making it still affordable for the consumers (Tobias, 2019). Early this year, rice tariffication

law was approved and signed by president Rodrigo Duterte. As a result, lifting the limits on rice

importation has been removed, providing a more competitive market for the local farmers and

putting their income at stake, but offering a lower price for consumers and having a steady supply

of rice. In comparison with this, Briones (2019), studied on the trends present in the rice market

that affects the pricing of rice especially if there is a higher competition from different suppliers.

In addition, as mentioned by Munusamy, et al., 2015, in his study “Rice Industry in Malaysia:

Challenges, Policies and Implications”, wherein it talked about how rice importation maintains a

staple rice supply for the country.

As indicated in the study conducted by Briones (2019), the production supply of rice in the

market is all based on the independent and fair competition however, issues concerning the level

of competition of rice in the market are raised up. This paper covers the fast appraisement of the

industry from production, harvesting, milling, distribution and trade. In addition, the study also

distinguishes the possible anti-competitive laws and regulations that can affect the entry and

expansion of suppliers, moreover, results of the higher competition in the market is presented in

order to identify if the stage of the industry is beneficial in the conformation and balance of cartel.

Based on the study, market sellers confirm that cost manipulation of prices are not completely

eradicated from the market specifically in the times of low supply, however, strong competition in
the market is still visible. Furthermore, the findings of the study imply on having a less restriction

in the importation, processing and marketing of rice.

“Rice is the second most important crop in the world” (Matthews, 1995), and Asia is the

leading manufacturer and user of this product (Gumma, et.al., 2011). In this study, it states that if

the rice production will not increase with the incoming demand of rice in Malaysia. The country

will need to depend on the imported rice and the gathered data shows that the production of rice

in Malaysia cannot sustain the demand if they will follow the average annual growth rate. With

the gap with the production of rice and the demand, the only way to fill in the said gap is rice

importation. Rice is a very important food that is widely consumed in Malaysia and it is very

important to the government to ensure that they can provide the demand of rice in the future and

in the current time, as a result, rice importation should be implemented in order to prevent the

scarcity of rice supply in the country (Munusamy, et al., 2015).

In summary, importation of rice has a big role in the economical state of a country, it may

bring liability to farmers or it may help to provide lower prices of rice for consumers and maintain

the supply of rice of the country. The study of Briones (2019) and Munusamy, et al., (2015), gives

emphasis on the importance of rice importation and how it helps in aiding the supply of rice and

market competition. Both studies have concluded that it is a must to have rice importation for the

country. On the contrary, our paper would like to tackle the other side of rice tariffication, we

would like to give a greater emphasis on how the lifting of rice importation limit will affect the

income of local farmers and producers of rice in the Philippines.

References

Briones, R. (2019). Competition in the Rice Industry: An Issues Paper | Philippine

Competition Commission. [online] Phcc.gov.ph. Available at: https://phcc.gov.ph/competition-in-

the-rice-industry-an-issues-paper/ [Accessed 8 Nov. 2019].

Rajamoorthy, Y., Rahim, K. B. A., & Munusamy, S. (2015). Rice Industry in Malaysia:

Challenges, Policies and Implications. Procedia Economics and Finance, 31, 861–867. doi:

10.1016/s2212-5671(15)01183-1.

Tobias, A. (2019). The Philippine Rice Tariffication Law: Implications and Issues. [online]

Ap.fftc.agnet.org. Available at: http://ap.fftc.agnet.org/ap_db.php?id=960&print=1 [Accessed 8

Nov. 2019].