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.
In reaction to price hikes that pushed rice to P70 per kilo in 2017, Duterte declared the issue "urgent" in October 2018. According to Finance Assistant Secretary Tony Lambino, the bill would help in cutting rice costs by P7 per kilogram. Accordingly, as specified by the Bangko Sentral ng Pilipinas, the proposed bill would also diminish inflation by 0.6 percent. Hereafter, the Republic Act 11203, or the Rice Tariffication Law (RTL), would result in the abolition or relaxation of formerly levied quotas on rice imports, permitting traders or private sectors to import endless amounts quantity of rice. RTL, as being explicated, would offer supplementary measures to intensify the farmers’ productivity. However, in accordance with the concept of supply and demand, as soon as rice imports entered the Philippine market, the prices of local rice fell. The signed law resulted in reduced rice prices by expanding supply (Ichimura A. 2019).
How RTL affects the agricultural sector of the Philippines?
President Rodrigo Duterte signed the Rice tariffication law which amended the Agricultural tariffication ACT of 1996 on February 14, 2019. However, as a newly signed bill, undesirable sides suddenly arose such as the oversupply of rice due to embellished imports. Consequently, this resulted in low-priced rice that drove our inland agriculturalists to offer their harvests at a way cheaper price in the market. Even with the existence of RCEF, it does not guarantee the safeness of domestic farmers due to a scarcity of presidency regulation. Though the law eased consumers in terms of purchasing rice, resident farmers are suffering as the low prices scarcely break even with preparation and production outlays.
On the opposite hand, farmgate prices are falling double or triple times faster than retail rice prices. Apparently, this can be a recipe for upheaval for everybody whose proceeds are predicated on farmgate prices. Liberalized rice importation comprehends negative impressions on other businesses and several industries, adding to the apparent alteration on the agricultural sector of the country.
What are the notable issues of RTL after its implementation?
1. Some farmers may be incapable of adjusting to cheaper imports.
The law eliminated quantitative regulations on rice imports which offers the consumers a wide-ranging assortment of selections, diverse rice kinds and sorts withinside the nearby marketplace at greater viable rate levels. Not all farmers are proficient to modify and feature a decrease rate to withstand competition in the market. The Philippines is one of the international locations with the highest production expenses, so whenever farmers lower their prices, it will certainly cause significant losses and further, destructive results. As Raul Montemayor pointed out, others would reduce outlays due to the fact that they knew the rice import flood might hold and they would not be able to recoup their capital.
2. Laborers may lose their jobs.
Under this amended law, a subsidy fund for the farmers which is legally termed as Rice Competitiveness Enhancement Fund (RCEF) will be offered to augment rice farmers’ competitiveness and proceeds. Fifty percent (50%) of the fund is to be allotted for rice farm machinery and equipment or the Mechanization Program. When farming becomes modernized, the workers may also lose their jobs due to the fact that rice farmers will be introduced to the application of suitable manufacturing and post-production mechanization technologies.
3. The country will probably be reliant on imports.
In the lengthy run, there is no assurance that the country can attain rice self-sufficiency. Despite having a subsidy fund for the Filipino farmers, it is far trivial in comparison with the subsidies given with the aid provided by other states to their rice farmers – US$1 billion assist with the aid of using Vietnam and US$7 billion with the aid of using Thailand. According to Tobias (2019), relying on rice imports makes the country vulnerable to higher international market prices in addition to rice manufacturing and export choices of different countries. In 2008, for instance, Vietnam, India, and Pakistan confined their rice exports amidst growing worldwide rice fees.
Notes for Improvements
Creation of a program for farmers who cannot abruptly adjust for them to have a competitive price level. The program must accordingly support and provide the farmers financial assistance in transitioning to different crops.
Aside from focusing on pieces of machinery and equipment, cost production should be decreased. Lower the price of rice seeds. Farmers should be able to purchase low-cost rice seeds with good quality and fits our country’s typography.
Lower the tax on products used by the farmers such as fertilizers and insecticides. Through this, production outlays of the farmers can be reduced thus, resulting in a higher return on investment.
Allow the National Food Authority (NFA) to play a business position withinside the industry in terms of purchasing a larger amount of rice at a higher price.
References:
Ichimura, A. (2019). The Rice Tariffication Law, explained. https://fnbreport.ph/9689/the-rice-tariffication-law-explained/
Gomez, E. J. (2021, June 24). Rice tariffication law gets mixed views. The Manila Times. https://www.manilatimes.net/2021/06/24/business/agribusiness/rice-tariffication-law-gets-mixed-views/1804425
Tobias, A. M. (2021, January 12). The Philippine Rice Tariffication Law: Implications and Issues. FFTC Agricultural Policy Platform (FFTC-AP). https://ap.fftc.org.tw/article/1372
Writer, S. (2019, October 29). Duterte’s war on inflation hammers Philippine farmers. Nikkei Asia. https://asia.nikkei.com/Spotlight/Asia-Insight/Duterte-s-war-on-inflation-hammers-Philippine-farmers
Tobias, A. (2019, May 23). The Philippine Rice Tariffication Law: Implications and Issues. https://ap.fftc.org.tw/article/1372?fbclid=IwAR2RmIYVeOkND3RHy0ATQ3SoySF4E0j4f2Ez58AkqeZv2XUDBLwPZ9ONyQo
