Rice prices to remain high in next 3 years

MANILA, Philippines — Rice prices will remain high in the next three or four years even if imported rice will soon flood the market with the lifting of the quantitative restriction and the imposition of tariffs, Agriculture Secretary Emmanuel Piñol said.

Piñol said while rice prices are seen to decrease by as much as P7 per kilogram once the tariffication bill is passed, the effect would take some time.

“Just because the President announced that prices would  go down (once the bill takes effect), doesn’t mean it will happen tomorrow. It is a long process,” Piñol told reporters on the sidelines of DA’s budget hearing in Congress yesterday.

As the government moves toward the removal of QR, Republic Act 8178 or the Agricultural Tariffication Act of 1996, which had put the rice import quota in place, must be amended.

Imposing tariffs is the option that the government needs to implement to protect farmers from the inflow of imported rice once the QR has been lifted as part of the country’s commitment to the World Trade Organization.

“The effect will only be felt after all support for the rice industry is delivered and that’s when the farmers will be able to produce more. Cost of production will be cut by a third and will make farmers more competitive and stabilize the price of palay, “ Piñol said.

To ensure that farmers will really benefit from tarrification, Albay first district Rep. Edcel Lagman proposed that about P20 billion in revenues from the tariff should go to the rice competitiveness enhancement fund (RCEF).

 “Proceeds from the fund should not be subjected to GAA (General Appropriations Act). It should be released automatically by the DBM (Department of Budget and Management) on a periodic basis,” Lagman said.

Once QR is  lifted, it is estimated that about two million metric tons (MT) of rice will enter the Philippines every year.

“It will also give assurance to members of Congress who are pessimistic on the effectiveness of tarrification and the industry stakeholders who want to make sure hey will be protected by the government,” Piñol said.

The DA reiterated that the lifting of QR would not harm farmers because as early as now, there are already speculations that rice supply in the global market next year will be very tight.

“What the economic managers are saying that we should just rely on imports may only work for the short term basis and  not in the long term,” Piñol said.

The DA aims to sustain the momentum of higher local production.

For this year, palay production may reach 19.8 million MT.  It is seen to increase to 20.47 million MT by 2019.