1) The Philippine Rice Tariffication Law replaced quantitative import restrictions on rice with tariffs in order to comply with World Trade Organization agreements and liberalize trade.
2) The law sets tariff rates of 35-40% for ASEAN countries and up to 180% for non-ASEAN countries above an import volume of 350,000 metric tons.
3) To support farmers adjusting to competition, the law allocates $10 billion annually for six years to programs for machinery, seeds, credit, and extension services through the Rice Competitiveness Enhancement Fund.
1) The Philippine Rice Tariffication Law replaced quantitative import restrictions on rice with tariffs in order to comply with World Trade Organization agreements and liberalize trade.
2) The law sets tariff rates of 35-40% for ASEAN countries and up to 180% for non-ASEAN countries above an import volume of 350,000 metric tons.
3) To support farmers adjusting to competition, the law allocates $10 billion annually for six years to programs for machinery, seeds, credit, and extension services through the Rice Competitiveness Enhancement Fund.
1) The Philippine Rice Tariffication Law replaced quantitative import restrictions on rice with tariffs in order to comply with World Trade Organization agreements and liberalize trade.
2) The law sets tariff rates of 35-40% for ASEAN countries and up to 180% for non-ASEAN countries above an import volume of 350,000 metric tons.
3) To support farmers adjusting to competition, the law allocates $10 billion annually for six years to programs for machinery, seeds, credit, and extension services through the Rice Competitiveness Enhancement Fund.
Perception on the Rice Tariffication Law of San Antonio, Zambales Farmers during October
2020
Background of the study
Tariffs and quantitative restrictions (QRs) are two policy instruments used in dealing with the international trade of goods. Tariffs are the taxes imposed by the government on both imported and exported products, while quantitative restrictions (QRs) are measures such as quotas, bans, and licensing requirements imposed by the government to limit the volume of a particular commodity that enters the country [1]. The Philippines acceded to the World Trade Organization (WTO) in 1995. Under the agreement on agriculture, QRs and other protective measures that may distort free trade will be removed and replaced by reduced tariff rates. Rice was, however, exempted from the removal of QR because of food security issues [2]. The Philippine requested QR on rice imports until 2005 but was extended until 2012 and then extended again until June 30, 2017. For several years, the government has adhered to rice QRs in protecting the local rice industry and to prepare the local farmers to become competitive in the world market. As trade liberalization is being pushed through, the Philippine rice industry bears the impact of global competition. Liberalizing trade means loosening the restrictive measures to a certain degree to ease the flow of goods and services in and out of the country [3]. After 24 years since the membership of the Philippines with WTO, QRs on rice imports have finally been lifted through the passage of RA 11203 (An Act Liberalizing the Importation, Exportation and Trading of Rice, Lifting for the Purpose the Quantitative Import Restriction on Rice, and for Other Purpose) also known as the Philippine Rice Tariffication Law which took effect on March 5, 2019. The law essentially allows for the liberalization of rice imports. This removes the previously placed quota and replaced with higher tariffs on rice imports, permitting traders to import a near-unlimited quantity of rice [4]. The new law provides the following tariff rates: 35% for rice imports originating from Association of Southeast Asian Nations (ASEAN) member states; 40% for rice imports originating from non-ASEAN countries and within the minimum access volume (MAV) of 350,000 metric tons; 180% for rice imports originating from non-ASEAN countries and above the MAV [5]. The law provides safety net measures for local farmers under the Rice Competitiveness Enhancement Fund (RCEF) which is expected to help and support the rice farmers to cope up with the liberalization of the rice market. The government will allocate P10 billion annually for the next six years to support the Filipino rice farmers and this will be assessed after the first three years of its implementation. The P10-BRCEF will be allocated and disbursed as follows: 50% for rice farm types of machinery and equipment, 30% for rice seed development, propagation and promotion, 10% for expanded rice credit assistance and10% for rice extension services. The law provided furthermore that tariff revenues in excess of the P10 billion will be earmarked for the following: rice farmer financial assistance, titling of agricultural rice lands, expanded crop insurance program on rice and crop diversification program. In addition, the NFA will buy rice exclusively from local farmers for its buffer stocking mandate for emergencies and disaster relief [5]. Even though the government gives assurance that proper implementation and measures will be put in place, rice farmers are still concerned that tariffication law would hurt them and the local rice industry in the long term.