Farmers lobby Marcos not to extend EO setting low rice tariffs

THE Federation of Free Farmers (FFF) asked President Ferdinand R. Marcos, Jr. not to extend the effectivity of an executive order setting lower tariffs for rice imports. 

FFF National Manager Raul Q. Montemayor said in a statement on Monday that lower tariffs do not benefit consumers.

Executive Order (EO) No. 171 signed by former President Rodrigo R. Duterte in May set the tariff for in-quota rice imports at 35%, equivalent to the rate enjoyed by grain imports from Southeast Asia, which enjoy preferential treatment due to trade agreements. Rice beyond the minimum access volume (MAV) quota is charged 50%.

The EO rates are set to expire by year’s end.

“Although imports from Pakistan and other countries outside the Association of Southeast Asian Nations (ASEAN) arrived at a cheaper price because of lower tariffs, ordinary consumers did not benefit because most of the imports were for premium grades of rice,” Mr. Montemayor said.

“If ever traders passed on any benefits to consumers, the beneficiaries were the rich consumers of Indian Basmati rice, Japanese stick rice, or clients of five-star restaurants serving exotic rice dishes,” he added.

The Foundation for Economic Freedom has petitioned the Tariff Commission to extend EO 171, which also lowers tariffs for pork, corn, and coal, saying that lower tariffs help keep inflation contained. 

The EO also reduced the tariffs on pork within the MAV quota to 15% from 30%, while pork imports beyond the quota are currently charged 25%, down from 40%.

The EO also lowered the tariffs of in-quota corn imports to 5% from 35% and those beyond the quota to 15% from 50%. The order also imposed zero duties on coal imports, down from 7%.

Mr. Montemayor said rice from Pakistan is expected to diminish because of extensive flooding there, while India will impose a 20% tax on rice exports to ensure rice remains adequate for domestic needs.

Mr. Montemayor proposed that the Philippines develop supply arrangements with other ASEAN countries such as Cambodia and Myanmar.

“This strategy will not require any tariff adjustment, will not incur any losses in customs duties, and will even improve our trade relationships with our ASEAN neighbors,” Mr. Montemayor said.

“Customs data further indicate losses of over half a billion pesos in potential tariff collections due to the slash in tariffs on rice imported from non-ASEAN sources. A further analysis revealed that rice from Pakistan would have been competitive against rice from Vietnam, the largest exporter to the Philippines, even if the former’s tariff had been retained at 50%,” the FFF added. — Revin Mikhael D. Ochave