DA mulls ‘gradual’ increase in rice tariff

MANILA, Philippines — The Department of Agriculture (DA) is pushing for the retention of the current rice tariff rate of 15 percent for the next quarter before a “gradual” increase is made to prevent market shocks.

Agriculture Secretary Francisco Tiu Laurel Jr. said he and Socioeconomic Planning Secretary Arsenio Balisacan think that any increase in the rice tariff should be made in the next review, which will be at the end of the first half.

Tiu Laurel said they would meet with President Marcos to discuss the recent review on the rice tariffs and the possible actions moving forward.

“We will be recommending an increase in tariff (in June), but maybe gradual increases so there will be no market shocks,” he said.

The rate of increase will still have to be determined during the next round of review.

“What should not happen, which I think is correct, is (an increase) from 15 percent to 35 percent in one go,” Tiu Laurel said.

“That is dangerous. There will be market shocks. That is my personal recommendation,” he added.

The National Economic and Development Authority (NEDA) led the review on the country’s rice tariff rate last March 27, pursuant to the regular review mandated under Marcos’ Executive Order 62, which lowered the tariffs to 15 percent.

The review was co-chaired by the DA, with various rice industry stakeholders present during the meeting.

Sources present during the meeting told The STAR that there was no recommendation to increase or keep the current rice tariff rate because NEDA did not want to “preempt” the Tariff Commission (TC)’s public hearing on the rice tariff, which was held the following day.

“(It was) more on discussing what is happening to the (rice) market and what was the impact of the tariff cut, among others,” a source said.

The TC conducted a public hearing on March 28 regarding the petition of Samahang Industriya ng Agrikultura to revert the rice tariff rates to 35 percent for in-quota and 50 percent for out-quota imports.

In a related development, Tiu Laurel said the DA would be maintaining the maximum suggested retail price (MSRP) on imported premium rice at P45 per kilo for the next two months to prevent palay prices from going down further since the dry season harvest is about to peak soon.

Tiu Laurel disclosed that he initially wanted to bring down the imported rice MSRP to as low as P42 per kilo.

But since palay prices are falling down, the DA opted to stop at P45 per kilo to prevent traders from speculating in the market that could lead to lower farmgate prices, he added.

“This will be the MSRP until the harvest is done so that traders and rice millers buy palay at a price that farmers will not lose money,” Tiu Laurel said.

Various industry groups have lamented that farmgate prices of palay have dropped to as low as P14 per kilo, which they say is already below break-even cost, compared to last year’s P24 per kilo average price.

Industry stakeholders blamed the dropped in palay prices to the record-high imports last year that flooded the market as well as to the rice tariff cut that incentivized traders and millers to purchase cheaper foreign rice supplies.