Review of Related Literature

The Rice Tariffication Law was enacted to alleviate the pleas of the farmer
and the public consumer, yet it provides the contrary by giving an
unrestricted access to the importation of rice in the country, and killing off
the industry that it is aiming to give aide.
President Rodrigo Roa Duterte signed the bill into law on Feb. 15 2019,
according to the Official Gazette, and the law will take effect on Mar. 5,
according to the Department of Finance. The law’s implementing rules and
regulations will be enacted on Mar. 3 2019.1
A Senate Bill No. 1998 entitled “AN ACT REPLACING THE
QUANTITATIVE IMPORT RESTRICTIONS ON RICE WITH TARIFFS,
LIFTING THE QUANTITATIVE EXPORT RESTRICTIONS ON RICE,
AND CREATING THE RICE COMPETITIVENESS ENHANCEMENT
FUND, AMENDING FOR THE PURPOSE REPUBLIC ACT NO. 8178, AS
AMENDED BY REPUBLIC ACT NO. 9496, AND AS FURTHER
AMENDED BY REPUBLIC ACT NO. 10848, AND FOR OTHER
PURPOSES”2
Its purpose was to curb the continuous struggle of every Filipino with
inflation which causes an unstable price in the rice industry its aim is that the
reform will benefit both the Filipino Rice Farmers and Filipino Consumers.
The Rice Tarrification Law focuses on having rice importers pay a tariff as
oppose to the previous system of quantitative restriction. A quantitative
restriction is the limit to the amount of good that may be imported in the
country it is intended to protect local rice producers from the adverse effects
of cheap rice imports. Quantitative Restrictions are imposed on rice to
protect the farmers from the influx of cheap rice abroad.3
But with new Tarrification system the regulation of the foreign Rice
products entering the country takes on a different form. Tariffs are just taxes
imposed by governments for imported good, Tariffs are revenues for
government, and supposedly also a way of restricting trade and protecting
the domestic producers because they make imported goods more expensive.
In regards to Quantitative Restriction, although it affords a kind of
protection to the local farmers it becomes detrimental to the poverty stricken
part of our society, as the lack of control would result to a one sided
determination of the market value of rice.
On the other hand, the Tarrification system on rice products which gives
foreign rice importers an almost limitless amount of importation would solve
the former problem as the removal of the limitation would allow foreign
investors to bring as much products as they like, provided that they comply
with the new tariffs imposed on Rice, basically eliminating the control
formerly being held by local farmers in the control of our local rice market,
however this pose another problem altogether as without any limitation
restricting the foreign import of rice a shift in the paradigm takes place as

1
http://fnbreport.ph/features/agriculture/the-rice-tariffication-law-explained-anrii-20190221/
2
http://www.senate.gov.ph/lis/bill_res.aspx?congress=17&q=SBN-1998
3
https://www.rappler.com/business/224642-how-government-will-implement-rice-tariffication
this would result in the prices of locally produced goods unable to compete
to the cheap price of products offered in the domestic market.
Like in an editorial post made by the online news source, Rappler on
September 5, 2019. “As of Mid-August the average farm gate price of Palay
nationwide was recorded at P17.62 per kilo … a 21% drop from last year.
Retail prices of regular-milled and well-milled rice, by contrast, have
dropped by 10% and 7%, respectively. There’s considerable variation in rice
prices across the regions. Farm gate rice prices have
reportedly plummeted to as low as P9 per kilo in Pampanga and P7 per kilo
in Nueva Ecija and Bataan. Farmers fear rice prices will only drop further
come next harvest season.4
This just means that the solution they are giving for is merely a patch up job
to appease the masses, as the continuous decline in the prices would only
result to the continuous suffering of our local farmers in trying to compete
much more to survive in the already congested market paired that with the
rate the inflation is growing is just a omen for and even grim tomorrow.
Another looming question in the passing of this law is the additional powers
given to the President, in which in this law states “may increase, reduce,
revise or adjust existing rates of import duty up to the bound rate of rice
tariffs. In case of imminent forecasted shortage”5
This just means that there is no real limits to the tariffs imposed to the
foreign investors as the last safe guard placed upon in the law becomes a
flight risk as the President can increase or decrease such tariffs as he see fit
without any sort of repercussions or any sort of hindrance or care to local
farmers pleas to actually make a profit. This would eventually result to a
very plausible scenario of driving the local industry to the ground.
The passing of the Rice Tarrification Law also gives way for the creation of
the Rice Competitiveness Enhancement Fund. A fund that is created from
the tariff revenues of rice imports and will be used to directly support rice
farmers and fund innovative undertakings of the government to further
strengthen the rice industry. The RCEF will be allocated to rice producing
areas and earmarked as follows:
a. 50% will go to the Philippine Center for Postharvest Development and
Modernization (PhilMech) to provide farmers with rice farm
machineries and equipment; b. 30% will be released to the Philippine
Rice Research Institute (PhilRice) to be used for the development,
propagation and promotion of inbred rice seeds to rice farmers and the
organization of rice farmers into seed growers’ associations engaged
in seed production and trade; c. 10% will be made available in the
form of credit facility with minimal interest rates and with minimum
collateral requirements to rice farmers and cooperatives to be
managed by the Land Bank of the Philippines and the Development
Bank of the Philippines; and d. 10% will be set aside to fund
extension services by PhilMech, Agricultural Training Institute (ATI),
and the Technical Education and Skills Development Authority
(TESDA) for teaching skills on rice crop production, modern rice
4
https://www.rappler.com/thought-leaders/239392-analysis-plummeting-rice-prices-how-will-our-rice-
farmers-cope
5
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
 farming techniques, seed production, farm mechanization, and
knowledge/ technology transfer through farm schools nationwide.6

The problem with this is that the current trend of the administration
distribution becomes a problem, as that would entail that the
government gains first hand on the funds before it can actually be
distributed to the farmers. Like in a report made by the news site the
Business World it states that “The Department of Finance (DoF) said
rice import tariffs have totaled P15 billion, ensuring a surplus after the
Rice Competitiveness Enhancement Fund (RCEF) is provided P10
billion by law, which the government could deploy for aid to
farmers.”7 Which technically would mean a great thing except for the
fact that as of September of 2019 the government only released P2.46
billion as part of the Tarrification fund according to the Department of
Agriculture, and the funds was mostly allocated to Agricultural
Cooperatives and land owners, which means that the landless farmers
which composed the bulk of the work force in the local rice industry
are being left out to reap the benefits of the Tarriffication law meaning
that the very same thing is seeks to support is killing it in the process.

CONLUSION/ RECOMMENDATION

6
http://ap.fftc.agnet.org/files/ap_policy/960/960_1.pdf
7
https://www.bworldonline.com/rice-tariffs-top-p15-billion-exceed-rcef-requirement/
Although the Rice Tarrification Law brings a common good, the idea of an
affordable supply of rice to every home, a comfortable and stable occupation
for our farmers it is merely a patch up solution that paves way to a myriad
of other problems in term of sustaining the economic stability of the rice
industry in the country. The negative impact of the rice Tarrification far
outweighs its promised good, and these negative impacts ripples further that
what it is initially endorsed.
That the new law lacks empathy to our Filipino Farmers as they will now
struggle to compete with cheaper rice imports, thus increasing their suffering
and making them lose money more and is therefore decreasing their overall
production.
This would also result to the potential displacement of other industries as
well, such as the employees of the NFA, their retailers, and people that
produce rice by-products: Rice Millers having no rice to process would
mean that a lot more people are losing their jobs. The Animal feeds and Beer
Industry as their main ingredients Rice Bran is a by- product of the rice
milling process. A shortage of it would mean a possible increase in the prices
of pork and chicken same goes for the manufacturing of alcohol
The most looming problem is that it may enable Cartels of the rice trade and
will throw the poor sectors into a worsened state of hunger, there is no
guarantee that the retail prices will be lower in the long run with the
unhampered importation. Relying on rice imports makes the country
vulnerable to higher world market prices as well as to rice production and
export decisions of other countries.
Given the effects this would have it’s far more better to stick to the previous
system of Quantitative Restriction and just fortify the existing laws
protecting farmers actually supporting the locally produced goods instead of
relying to importation to accommodate any inadequacies since we produce
more than enough to actually meet the demand the problem however lies in
its execution to meet such demand.
 Introduction

The Philippines is an Agricultural State which means that the focal

point of some of our local policies revolve around the promotion of our
consumables efficiency making the price manageable to the consuming
public yet, also provides high income to farmers that produce them.
With the passing of the Rice Tarriffication Law the former system of
Quantitative Restriction has been amended by a tariff imposed on goods
imported in the Philippines, in this case, Rice.
The Irony now comes with the enactment of the bill into law, which is
the Rice Tarrification Bill (Senate Bill No. 1998) this essentially allows for
the liberalization of rice imports. This basically means that the previous
limitations place on rice imports will be removed, In turn would permit
traders/ importers to bring to the state a near-unlimited quantity of rice.
This in turn, runs contrary with the Philippine Rice Sector that has
always been the center of government Agricultural Policies, the aim of rice
importation is to make rice more accessible to Filipinos but in doing so
removes the safety nets for our farmers as increase in supply would decrease
demand which ultimately result in our own bread and butter being driven to
the ground.
The Rice Tarrification Law and the irony it
brings to the Pearl of The Orient.

SUBMITTED TO:
ATTY. DEAN ACE PAMARAN

SUBMITTED BY:
TOM LEMUEL M. SUMAWAY
2012-0250