Senate Committee on Agriculture Cynthia Villar frankly said that the Rice Tariffication Bill is seen as a last resort in which farmers will indeed be affected once it will be passed.
“We have no choice but to import because we will be penalized by the World Trade Organization (WTO) if we don’t,” Villar said in an interview with the media right after her speech during the International Banana Conference on Friday afternoon at the SMX Convention Center.
The Senator referred to the Quantitative Restriction (QR) on the Importation of Rice which was imposed on the Philippines after becoming a member of the WTO in 1995.
National Economic Development Authority (NEDA) in 2017 announced that the country will no longer extend the QR on rice importation.
Villar said that the bill that was certified as urgent by President Rodrigo Duterte on Wednesday, is a way to address the need to improve the availability of rice in the country, by allowing importation, but with an imposed tariff.
She then said, a Rice Competitiveness Enhancement Fund (RCEF) will be created to help the local farmers to compete in the market.
P10 billion annual subsidy will be sourced from the General Appropriations Act (GAA) or the national budget, which includes the mechanization, seedling distribution and trainings for farmers.
Villar said that the high priced labor cost hinders the mechanization of rice production.
“What we can do is to make our farmers competitive to imports,” Villar said.
In September, the Senate Bill 1998 or the Rice Tariffication Bill was sponsored by the Senate agriculture bill, wherein rice importers will be slapped by a 35% tariff rate in lieu of the QR that limits the volume of the rice imports every year.
Earlier, Finance Secretary Carlos Dominguez III said liberalizing rice importation will be a big help to the poor, noting that rice accounts for 20 percent of low-income households’ consumption
Economic managers, meanwhile are urging lawmakers to pass the proposed bill as a priority measure, to ensure supply of rice in the country.
Rice tariffication is being pushed more vigorously now that prices of rice are increasing and has pushed inflation up.
Rice accounts for about 9.6 percent in the consumer price index (CPI) basket.
