The National Food Authority (NFA) will continue to operate even with the rice tariffication law in place, but it needs to strengthen its logistics capacity, ensuring that the government has enough buffer stocks of this staple grain with nationwide reach at all times, according to the Department of Finance (DOF).
Finance Assistant Secretary Antonio Joselito Lambino II said that starting March 5 when Republic Act (RA) No. 11203 or the Rice Tariffication Act took effect, the NFA’s import licensing and other regulatory functions ceased, although the crucial role of emergency buffer stocking remains and has been emphasized.
Under the law imposing tariffs on rice imports in lieu of quantitative restrictions, private traders would now be allowed to import rice so long as they comply with basic requirements set by the Department of Agriculture’s Bureau of Plant Industry (BPI) for food safety and protection of our farming areas, Lambino said at a recent media forum in Quezon City.
Lambino said the NFA’s task of regulating the rice sector was removed owing to the agency’s “inefficiencies” resulting from a controlled import system, and which left the agency saddled in debt amounting to about P145 billion.
Domestic rice prices also continue to be high compared to other countries in the region despite the NFA’s regulatory role, with farmers not benefiting as much as other players in the industry under the previous quantitative restriction regime, Lambino said.
But under RA 11203, he explained at the media forum that farmers would get to benefit directly from the import tariffs through the new Rice Competitiveness Enhancement Fund (RCEF), which would have an assured annual allocation of P10 billion, regardless of the amount generated from import tax collections.
As an advanced complimentary measure to the RCEF, the government has already released P5 billion in December 2018 to assist farmers in becoming globally competitive as the country shifts to a rice-tariffied system.
A large number of smallholder farmers also get to benefit from lower rice prices because they are also net consumers of the staple, Lambino said.
“We will have dedicated resources for the modernization and increased productivity of rice farming in the country,” Lambino said during the forum. “Under the previous non-tariffied regime, the difference between the farmgate price and retail price—the farmgate price is less than P20 per kilo, and retail is more than P40. The difference in the price does not go to the farmer, but to other players in the rice industry.”
Under the new tarrified setup, the taxes collected from private traders importing rice would be 100-percent earmarked for the programs under the RCEF meant to benefit rice farmers, Lambino said. DOF
