Peasant group wary slashed import tariffs will hurt local farmers, consumers

James Relativo - Philstar.com
Peasant group wary slashed import tariffs will hurt local farmers, consumers
Market vendors sell their wares at a market in Phnom Penh, Cambodia on December 15, 2022.
Philstar.com, file

MANILA, Philippines — Extending reduced import duties for another year will not help consumers and local food producers as the government hopes, peasant women and rice watch groups said.

President Ferdinand "Bongbong" Marcos Jr. has extended the Duterte-era Executive Order 171 to reduce tariffs on imported agricultural products until December 2023 amid "supply shortages" and high inflation rates. Tariffs are imposed to give locally-produced goods a price advantage over imports.

"The extension of tariff cuts on pork, rice, corn and coal is another year of local production destruction and bankruptcy of local food producers," said Amihan secretary general Cathy Estavillo on Tuesday. Estavillo is also spokesperson for Bantay Bigas.

"We have been saying that importation will not lead to lower food prices but the Marcos administration insists on offering this as a solution," she said in Filipino.

"It seems that this [executive order] is made to satisfy the greed of the few. It is clearly not in the interest of farmers or of consumers."

The EO lowers tariffs on the following goods, slashing government revenue that was supposed to be collected from imported goods:

  • in-quota shipments of pork at 15% (from 30%)
  • out-quota shipments of pork at 25% (from 40%)
  • in-quota shipments of rice at 35%
  • out-quota shipments of rice at 50%
  • in-quota imports of corn at 5% (from 35%)
  • out-quota shipments of corn at 15% (from 50%)

Socio-economic Planning Secretary Arsenio Balisacan said last Saturday that the extension aims to "provide relief to poor and vulnerable segments of the Filipino population whose welfare is reduced because of high inflation."

What are tariffs anyway?

Tariffs, essentially taxes, are usually implemented to protect weaker domestic industries against foreign competition. It makes imported goods more expensive, with the intention of driving consumers to patronize local producers.

"Lowering tariff rates on rice imports is an unnecessary and unwanted extension of [Republic Act] 11203 or the Rice Liberalization Law’s negative impact to rice farmers and consumers," Estavillo said.

While trade liberalization essentially increases the amount of foreign goods and products in the country, advocates said that this has caused local farmers to lose over P206 billion in profits in the first three years of the implementation of Republic Act 11203.

This, according to Anakpawis, triggered depressed palay farm gate prices while rice remains "unaffordable" for poor consumers.

Marcos Jr., who is de facto secretary of the Department of Agriculture, promised during the election campaign to bring down the price of rice to P20/kilogram, a goal that he said is achievable in the long term.

Instead of cuts on tariff to answer problems in supply and 14-year high inflation, Estavillo's group recommends a production subsidy of P15,000 and P10,000 cash aid to land tillers in order to boost local rice production and to "improve farmers' welfare."

To attain food security and self-sufficiency, the groups claim that policies and programs should address issues faced by producers such as monopoly of land and other resources — problems which are said to keep farmers and Filipinos "poor and food insecure."

"Reliance on a very limited and volatile global market for the country’s food security does not in any way guarantee food availability, accessibility and stability," Estavillo said.

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