Abstract

In the Philippines rice is a highly political commodity because it is the country’s main

staple; hence it’s been the core of agricultural policies. The country has been a signatory of the

World Trade Organization (WTO) in 1995 and under this agreement, in agriculture the

quantitative restrictions (QR) and other preventive measure will be removed and replaced by

tariffs. However, rice was exempted from the QR because of some food security issues, until

the RA No. 11203 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" or

known as the “Rice Tariffication Law (RTL), last February 14, 2019. Unexpectedly, after the

passage, rice imports grew significantly that the Philippines became the world’s largest rice

importer in 2019. As a result the rice prices have been decreasing; imported rice became

cheaper than domestically produced rice which negatively impacted our rice farmers. This

study will show that there is a need to amend the provisions of the Rice Tariffication Law and

make the Magna Carta for Small Farmers to be its leg, due to its wrongful assumption of the

affordability as the dimension of accessibility and improvement of the rice farmers.

Specifically, this will also show that the RTL defies, Article II Sections 9, 18, 19, 21 and

Article XII Section 1 and12 of the Philippine Constitution. Moreover, the law failed to

recognize the welfare and need for development of the rice farmers to have a good and stable

livelihood not by subjecting them to undue competition with subsidized rice imports.

Consequently, it also violated the inviolable right to food, right to access to produce food,

right to development and right to a standard and quality life.

i
 Table of Contents

Thesis Section Page

1. Cover
1.a Title Page
Blank Page
Author’s Declaration

2. Preliminary Pages
2.a Abstract i
2.b Table of Contents ii-iii
2.c List of Tables and Diagrams iv
2.d Definition of Terms v-viii

3. Introduction
3.a Background of the Study 1-3
3.b Thesis Statement 4
3.c Statement of Relevance of the Thesis 5
3.d Scope and Delimitation 6
3.e Methodology 7

4. Discussion
4.a Study of Relevant Laws and Jurisprudence
4.a.1 The Trade Policy Reforms in the Rice Sector 8-10
4.a.2 The Masaga ’99 Program 11-13
4.a.3 The Philippines and World Trade Organizations 14-16
4.a.4 Republic Act No. 8178 or “The Agricultural 17-18
Tariffication Act”
4.a.5 The Magna Carta for Small Farmers 19-21
4.a.6 The Rice Tariffication Law, its Objectives and 22-26
Key Provisions
4.a.7 The Tarrffication and the Rice Market 27-28

4.b Key Findings and Analysis

4.b.1 Profile of the Respondents 29-34
4.b.2 Awareness of Rice Farmers on Rice Tariffication Law 35-36
4.b.3 Impact of rice tariffication on rice farmer 37-40
4.b.4 Perception of the Rice Farmer on the Rice 41-43
Tariffication Law

5. Conclusion and Recommendation

5.a Conclusion 44-45
5.b Recommendation 46-48

6. Bibliography and Appendices

6.a Bibliography 49-53
6.b Appendices
ii
6.b.1 Republic Act 11203 54-65
6.b.2 Republic Act 8178 65-69
6.b.3 Republic Act 7607 69-88
6.b.4 Executive Order 135 89-90

iii
 List of Tables, Figures, and other Diagrams

Table Number Table Name Page

1 - Palay yields 1969-1978 13

2 - Changes in prices and margins, March 2018 – 27

February 2019 and March 2019 – February 2020,
by type of rice

3 - Demographic Profile of the 300 rice-farmers 30-34

respondents from Albay

4 - Awereness of the Farmers about the Rice 35-36

Tariffication Law

5 - Impact of the Rice Tariffication Law to the 37-38

Rice Farmers

6 - Rice Retail Prices for Locally-grown rice vs 40

Imported Rice

7 - Perception of the Rice Farmer on the Rice 41-42

Tariffication Law

iv
 Definition of Terms

For the purpose of clarification, the important terms used in this study have been defined.

1. Agricultural Products refers to specific commodities classified under Chapters 1-24 of the

Harmonized Commodity Description and Coding System (HS) adopted and used in Section

1611 of R.A No. 10863, otherwise known as the "Customs Modernization and Tariff Act"

(CMTA). In this study, it includes plant products that can be grown and harvested

extensively for profit or subsistence, particularly rice.1

2. ATIGA Rate refers to tariff rate commitments under the ASEAN Trade in Goods

Agreement (ATIGA) applicable to importations originating from Association of Southeast

Asian Nations (ASEAN) member States. It refers to the agreed maximum tariffs on

products committed by the Philippines to the World Trade Organization (WTO) under the

Uruguay Round Final Act, and under the ATIGA, in accordance with its tariff schedule

(Annex 2: Tariffs under the ASEAN Trade in Goods Agreement (ATIGA)-

PHILIPPINES)2

3. Buffer Stock refers to the optimal level of rice inventory that shall be maintained at any

given time to be used for emergency situations and to sustain the disaster relief programs of

the government during natural or man-made calamities.3

1
Republic Act No. 11203 : An Act Liberalizing The Importation, Exportation and Trading of Rice, Lifting for the Purpose the Quantitative
Import Restriction on Rice and For Other Purposes, Section 2, Paragraph (a)
2
Ibid. Section 2, Paragraph (c)
3
Ibid. Section 2, Paragraph (e)

v
4. Cooperative refers to a duly registered association of persons, with a common bond of

interest, who have voluntarily joined together to achieve a lawful common social

economic end, making equitable contributions to the capital required and accepting a fair

share of the risks and benefits of the undertaking in accordance with universally accepted

cooperative principles. 4

5. Export are goods and services that are produced in one country and sold to buyers in

another. 5

6. Import refers to a product or service produced abroad and purchased by the home country.

Imported rice is the commodity discussed in this study.6

7. In-Quota Tariff Rate refers to the tariff rates for minimum access volumes committed by

the Philippines to the WTO under the Uruguay Round Final Act.7

8. Market Infrastructure refers to facilities such as market buildings, slaughter houses,

holding pens and cold storage used by the farmers in marketing their produce.8

9. Minimum Access Volume refers to the volume of a specific agricultural product that is

allowed to be imported with a lower tariff as committed by the Philippines to the WTO

under the Uruguay Round Final Act.9

4
Republic Act No. 7607 : An Act Providing a Magna Carta of Small Farmers, Section 4, Paragraph (25)
5
https://corporatefinanceinstitute.com/resources/knowledge/economics/imports-and-exports/
6
Ibid.
7
Republic Act No. 11203 : An Act Liberalizing The Importation, Exportation and Trading of Rice, Lifting for the Purpose the Quantitative
Import Restriction on Rice and For Other Purposes, Section 2, Paragraph (f)
8
Republic Act No. 7607 : An Act Providing a Magna Carta of Small Farmers, Section 4, Paragraph (11)
9
Republic Act No. 11203 : An Act Liberalizing The Importation, Exportation and Trading of Rice, Lifting for the Purpose the Quantitative
Import Restriction on Rice and For Other Purposes, Section 2, Paragraph (h)
vi
10. Most Favoured Nation (MFN) Rate refers to Philippine tariff rates that are applicable to

imports from all sources as prescribed in the CMTA.10

11. Postharvest facilities include, but not limited to, threshers, moisture meters, dryers,

weighing scales, milling equipment, storage facilities, buying stations, market

infrastructure and transportation facilities.11

12. Pre-harvest facilities include, but are not limited to, plows, harrows, tractors, rotavators

and sprayers.12

13. Out-Quota Tariff Rate refers to the higher rate of customs duty that is levied on the

quantities of an imported agricultural product more than its minimum access volume.13

14. Quantitative Import Restrictions refers to non-tariff restrictions used to limit the amount

of imported commodities, including, but not limited to, discretionary import licensing and

import quotas, whether qualified or absolute.14

15. Retail refers to the sale of goods to the public in relatively small quantities for use or

consumption rather than for resale. It is the retailing or resale of rice to the consumers.15

16. Rice refers to all products classified under the Harmonized Commodity Description and

Coding System (HS) heading 10.06.16

10
Republic Act No. 11203 : An Act Liberalizing The Importation, Exportation and Trading of Rice, Lifting for the Purpose the Quantitative
Import Restriction on Rice and For Other Purposes, Section 2, Paragraph (i)
11
Republic Act No. 7607 : An Act Providing a Magna Carta of Small Farmers, Section 4, Paragraph (10)
12
Ibid. Section 4, Paragraph (9)
13
Republic Act No. 11203 : An Act Liberalizing The Importation, Exportation and Trading of Rice, Lifting for the Purpose the Quantitative
Import Restriction on Rice and For Other Purposes, Section 2, Paragraph (g)
14
Ibid. Section 4, Paragraph (j)
15
https://www.merriam-webster.com/dictionary/retail
16
Republic Act No. 11203 : An Act Liberalizing The Importation, Exportation and Trading of Rice, Lifting for the Purpose the Quantitative
Import Restriction on Rice and For Other Purposes, Section 2, Paragraph (k)
vii
17. Rice Shortage is a situation where the quantity available or the supply of the commodity

in a market falls short of the quantity demanded or required at a given time.17

18. Small Farmers refers to natural persons dependent on small-scale subsistence farming as

their primary source of income and whose sale, barter, or exchange of agricultural

products.18

19. Tariff refers to a tax levied on a commodity imported from another country. It earns

revenues for the government and regarded as instruments to promote local industries by

taxing their competitors. The benefit is accorded to the local producers by the maintenance

of a domestic price at a level equal to the world price plus the tariff.19

20. Tariff Equivalent refers to the rate of tariff that provides comparable protection under

existing quantitative import restrictions, reflected by the average price gap between

domestic prices and world prices.20

21. Tariffication refers to the lifting of all existing quantitative restrictions such as import

quotas or prohibitions, imposed on agricultural products, and replacing these restrictions

with tariffs.21

22. Yield refers to the full amount of an agricultural or industrial product. In this study, the

yield discussed was the rice produced by the Filipino farmers at a given time.22

17
Republic Act No. 11203 : An Act Liberalizing The Importation, Exportation and Trading of Rice, Lifting for the Purpose the Quantitative
Import Restriction on Rice and For Other Purposes, Section 2, Paragraph (l)
18
Republic Act No. 7607 : An Act Providing a Magna Carta of Small Farmers, Section 4, Paragraph (1)
19
Republic Act No. 11203 : An Act Liberalizing The Importation, Exportation and Trading of Rice, Lifting for the Purpose the Quantitative
Import Restriction on Rice and For Other Purposes, Section 2, Paragraph (m)
20
Ibid. Section 2, Paragraph (n)
21
Ibid. Section 2, Paragraph (o)
22
https://www.merriam-webster.com/dictionary/yield
viii