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Rice tariff cut a tool vs. shortage, inflation

19 September 2023

In Las Piñas Market, a variety of rice grain prices, reflecting their quality, are on display. Economists warn that the continued enforcement of a price cap on rice could further fuel inflation. August inflation rose to 5.3 percent after six consecutive months of decline. Meanwhile, outraged farmers rallied at the offices of the Foundation for Economic Freedom, the Tariff Commission, the Federation of Filipino-Chinese Chamber of Commerce and Industry, and the Department of Finance. They denounced a “sinister plot” by leaders of these organizations to undermine the livelihoods of millions of farmers, jeopardize food self-sufficiency, and hinder the growth of local agriculture—all to benefit a select group of privileged importers and traders, said their official statement. This ongoing dispute underscores the complex dynamics surrounding rice pricing and its potential impact on inflation and agriculture

AMID calls for his resignation, Finance Secretary Benjamin E. Diokno on Monday maintained that the reduction of rice import tariffs is part of the administration’s “comprehensive” plan of pulling down the domestic prices of the grain.

“The Executive Department is currently discussing at the highest level the proposal to reduce import tariffs on rice as part of a comprehensive strategy to reduce prices for consumers and mitigate a potential shortage of the staple due to the impact of the ongoing El Niño phenomenon,” Diokno said in a statement on Monday in response to calls from various agriculture groups for him to resign over his proposal to reduce rice tariffs.

Seven major farm groups mounted a caravan on Monday to demand his resignation—and that of National Economic and Development Authority Secretary Arsenio Balisacan over the rice tariff issue.

Diokno emphasized that the DOF’s position would always support “appropriate” policy responses that would “promote” the “greatest good for the greatest number of Filipinos.”

“Rest assured that the DOF, in coordination with other relevant government agencies and stakeholders, shall pursue programs and support measures to balance the interests of domestic rice farmers while keeping rice affordable for consumers—especially the poorest households,” he said.

Various industry groups staged rallies in front the offices of the proponents behind the tariff reduction on rice imports, which included the DOF, the Foundation for Economic Freedom, and the Federation of Filipino-Chinese Chamber of Commerce and Industry Inc. The groups also went to the Tariff Commission (TC), which held a public hearing on the proposed tariff reduction on rice imports last Friday.

The groups are opposing the proposal of the economic managers to slash the current tariffs on rice imports to as low as zero percent and urged President Marcos Jr. to remove Diokno and Balisacan.

The groups included the Federation of Free Farmers (FFF), Kilusang Magbubukid ng Pilipinas (KMP), United Broiler Raisers Association (UBRA), Pambansang Mannalon, Mag-uuma and Magbabaul, Magsasaka ng Pilipinas (P4MP), the National Movement for Food Sovereignty (NMFS) and Bantay Bigas.

Other groups were Task Force Mapalad (TFM), Crop Protection Association of the Philippines (CPAP), National Federation of Peasant Women (AMIHAN), National Rice Seed Growers Federation of the Philippines (PhilPalay), and Samahang Industriya ng Agrikultura (SINAG).

“These people, with a history of disdain for local agriculture and Filipino producers, are now conniving to annihilate the agriculture sector,” they said in a joint statement on Monday.

Last week, the DOF revealed that it wants the rice tariffs on rice to be reduced to as low as zero percent to cushion the impact of rising world market rice prices and temper the increase of the price of the staple locally. 

During the TC’s Friday public hearing, the FFF argued that local farmers stand to lose P87.76 billion in income if the  proposed tariff cuts on rice push through.

Source : Business Mirror