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  • Perception On The Rice Tariffication Law of San Antonio, Zambales Farmers During October 2020

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    Cristine Joy Agustin
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    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.

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    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.

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    487 views1 page

    Perception On The Rice Tariffication Law of San Antonio, Zambales Farmers During October 2020

    Uploaded by

    Cristine Joy Agustin
    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.

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    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.

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