The Federation of Free Farmers (FFF) welcomed the move of the Department of Agriculture (DA) to recommend an increase in rice import tariffs and a temporary halt in imports to protect local farmers. The Cabinet will reportedly discuss this proposal with President Ferdinand Marcos, Jr. on the sidelines of his ongoing state visit to India.
Field reports indicate that prices for freshly harvested palay have gone down to as low as PHP8 per kilo, down 31 percent from prices a year ago, resulting in an estimated PHP54.5 billion drop in farmers’ incomes during the first six months of the year.
The FFF attributed the steep decline to the uncontrolled entry of cheap imports following the government decision in July 2024 to reduce import tariffs to 15 percent. This led to a supply glut which was exacerbated by the aggressive rollout of the subsidized Php 20 kilo rice program. The FFF also cited reports that a government corporation under the DA even undertook imports of rice from India despite legal provisions saying that government buffer stocks can only be sourced from local farmers.
“We are relieved that the DA has finally acknowledged the problem, but we feel that they should have acted sooner and more decisively and not allowed prices to dip so low,” said Raul Montemayor, FFF National Manager.
The FFF noted that rice prices need not increase even if the tariff is raised if the government is able to more effectively control profiteering among market players.
“The trading margin between import costs and retail prices averaged only about P13 per kilo before the rice crisis. In recent months, the margin ballooned to more than P20 per kilo despite the decline in international rice prices,” added Montemayor.
The FFF proposed that the tariff adjustment be done by invoking the Safeguard Measures Act (Republic Act 8800) which authorizes the DA Secretary to impose provisional safeguard duties on top of current tariffs in the event of an import surge that harms, or threatens to harm, local farmers. It added that the provisional duties can be set to a level that would temporarily discourage additional imports, and would apply to imports from both ASEAN and non-ASEAN countries.
The FFF explained that changing the tariffs through an Executive Order will have to undergo a lengthy process of consultation and deliberations. Additionally, the EO can be issued only in October when Congress is on recess.
The FFF added added that while the option for the President to impose a temporary ban on rice imports is provided under the recent amendment to the Rice Tariffication Law, it may be flagged as a violation of World Trade Organization (WTO) rules which generally prohibit the reimposition of quantitative import restrictions.
