THE DOWNSIDE OF THE REPUBLIC A CT NO. 11203 Table 1.

Quarterly production and farm gate price of palay,

Philippines 2014-2020
THE P HILIPPINE RICE TARIFFICATION L AW

The Rice Tariffication law or “An Act Liberalizing the Importation,

Exportation and Trading of Rice, Lifting for the Purpose the
Quantitative Import Restriction on Rice and for Other Purposes”
signed into law by President Rodrigo Roa Duterte on February 14,
2019 which replaces the Quantitative Restrictions (QRs) on the
importation of rice with general tariffs. The removal of QR increased
the rate of imports and made the price of imported rice cheaper than
domestically produced rice. The competition between domestic rice
production and cheaper rice imports threatened the Filipino farmers’
livelihood. Majority of the country’s annual rice requirement comes
from locally produced rice. Eventually, Rice Tariffication Law will
crucial the national food security because it discourages the local
farmers to continue pursuing agriculture due to poor incomes and
very low local rice “palay” cost.

RICE TARIFFICATION HURTS FARMERS’ Source: Philippine Statistics Authority (PSA), Palay and Corn
LIVELIHOOD Production Survey (PCPS) Weekly Cereals Price Monitoring
(WCPM)

The high inflation rate of rice price on the last quarter of 2018, lead
the government to Rice Tariffication Law to remove the government’s
restriction on rice importation to ensure the availability of cheaper
rice in markets. It imposed tariffs on imported rice; 35% for the
imports from ASEAN countries and 40% for the imports from non-
ASEAN countries. The Philippine imported over 3 million metric tons
of rice after the implementation of the rice liberalization, making the
country the 2019’s top rice importer in the world, surpassing the
previous year China’s rank. This law also removed the National Food
Authority’s (NFA) regulatory powers over the importations and
exportations of rice. NFA rice will also be exclusive only for calamity
needs and no longer exercises trading of rice, domestically and
internationally. Because of this, small and big rice traders are
hesitated to take the risk of buying palay because of their capability
now to manage their own importation of cheaper rice to sell.
Alongside of much cheaper price of the rice imports that the local rice
cannot compete, the local farmers suffer distress from financial
bankruptcy, and debt.
The prices recorded in the Farm gate is only for good and dry palay,
and wet palay may be sold in lesser price. The rice price today is still
lesser than the NFA buying price of 19 pesos per kilo when they are
still full functional. Some of local rice traders even stopped their palay
buying operations because of the overproduction of rice in the
market. The continuous price drop of palay and the inrush rice
importation causes a huge impact on local Filipino farmers and farm
workers.
Table 2 shows the average cost spent in irrigated palay production in
the Philippine are about Php.11.20 (PSA, 2020). However, according
to FFF, the price basis of wet palay was reported to range from 11 to
14 pesos per kilo due to cost of seeds, labor cost, rental machineries,
and high fuel cost, making farmers barely make money from rice
farming.
Table 2. All Palay: Summary of Updated Average Costs of
Production, by Season and Region, Philippines, 2019

The Federation of Free Farmers (FFF) proclaimed that the the

farmers lost around 80 billion pesos due to drastic decrease of palay
price. According to the Philippine Statistics Authority’s (PSA) table of
Quarterly Production and Farmgate Price of palay in the Philippines
from 2014 to 2020, the lowest original and adjusted price of palay
since 2014 was recorded in the fourth quarter of 2019.The decline in
rice price started on first quarter of 2019 and continuously
happening. Table 1 show that the seasonal adjusted farm gate price
of palay in the fourth quarter of 2019, which was registered at P16.27
per kilogram, is slightly lower by 1.7 percent than the third quarter’s
level of P16.55 per kilogram. On an annual basis, farmgate price was
23.7 percent lower than the previous year’s same quarter quotation
of P21.31 per kilogram (PSA, 2020).

Source: Psa, Updated Production Costs And Returns Of Selected

Agricultural Commodities, Palay And Corn

These situations are discouraging the farmers to stay in agriculture,
and if the population already meet the number of people that will limit
the available rice in world’s market because of the higher rice
demands in every country, the country’s food security could be at
stake.
THE PROMISES OF RICE TARIFFICATION
LAW
The Rice Tariffication law was signed into law mainly to temper the
surging rice price inflation happened on 2018. However, experts said
that the said imposed tariff rate for the rice imports are still very high
to meet the desired affordable rice price for all to aid the inflation.
The poorest sectors who used to afford P27.00 NFA rice can no
longer buy it because NFA now is unavailable in markets. After the
implementation of RTL in 2019, the rice price has gone P40 and
above which is very far from the supposed target price of the
government.
Palay and Corn Quarterly Bulletin. (2020). Retrieved from
https://psa.gov.ph/sites/default/files/Palay%20and%20Corn%20Quarterly
%20Bulletin%2C%20January%202020.pdf
NEDA leads crafting of Rice Tariffication Law’s
IRR. (2019). Retrieved November 23, 2020, from National Economic and
Development Authority website: http://www.neda.gov.ph/
Purungganan, J. (2019). Farmers demand
government to repeal rice liberalization law. Retrieved November 23,
2020, from Focus on the Global South website: http://www.focusweb.org/
Seasonally Adjusted Palay/Rice Production and Prices
October-December (2019). Retrieved November 24, 2020, from Philippine
Statistics Authority website: https://psa.gov.ph/
Seasonally Adjusted Palay/Rice Production and Prices
April-June 2020. (2020). Retrieved from
https://psa.gov.ph/sites/default/files/Special-Release-Seasonally-Adjusted-
Palay-Rice-Production-and-Prices-April-to-June-2020-signed.pdf/
Simeon, L.M. (2020). Farmers lose P68 billion from
rice Tariffication law. Retrieved November 23, 2020, from Philstar website:
http://www.philstar.com/
Tobias, A.M. (2019). The Philippine Rice
Tariffication Law: Implication and Issues. Retrieved November 23, 2020,
from FFTC Agricultural Policy Platform website: http://www.fftc.org/
Updated Production Costs and Returns of Selected Agricultural Commodities, Palay
and Corn. (2020). Retrieved from https://psa.gov.ph/sites/default/files/CoP
%20Palay%20and%20Corn%2C%202017-2019_signed.pdf/

Figure 1. Monthly Retail Prices for Rice Philippines, January 2018 -

December 2019

Source: Data on prices from Weekly Cereals and Fertilizer Price

Monitoring (WCFPM) of the PSA

Figure 1 shows 2019 average retail price per kilogram of rice was
₱43.01, lower by 4.8 percent than the previous year’s level of
₱45.18. Monthly retail prices of rice showed a decreasing trend, from
₱45.07 in January 2019 to ₱41.48 in December 2019. Monthly
prices were also lower than their respective levels in 2018, except for
the first three months of 2019 (PSA, 2020).
It seems that it is beneficial for the government and big traders but a
challenge for the farmers and the poorest communities and sectors.
References
Calibo, R.A. (2019). Rice Tariffication to slash rice prices-NFA.
Retrieved November 23, 2020, from Philippine Information
Agency website: http://www.pia.gov.ph/
Gomez. E.J. (2020). Congress urged to review rice tariffication law. Retrived
November 24, 2020, from The Manila Times website:
http://www.manilatimes.net/
House of Representatives. An Act liberalizing the
importation, exportation, and trading of rice, lifting for the purpose the
quantitative import restriction on rice, and for other purposes. Retrieved
from http://www.congress.gov.ph/legisdocs/r
Montemayor, R. (2020). Winners and losers from
the rice Tariffication law. Retrieved November 23, 2020, from Inquirer
website: http://www.inquirer.net/