Importers’ rice cartel?

The new untested  Rice Tariffication Law could affect   the productivity of local farmers, lower the price of rice, or ensure a stable rice supply only if the government will make good its assurance of a P10-billion substantial support to rice production in  agriculture.

This money support for rice farmers from government is envisioned to come from the tariff of importers duties ranging from  35 to 45% rate.  If realized, the importation tarriff is expected to hit P100-billion. What if unforeseen events will fall?  What if rice importers will form a cartel and control the price of rice?    How will the rice industry survive? Of course it will go back to the poor Filipino farmers burden. Or government will form its own set of importers by using favored  business groups.

The Rice Tariffication Law replaces volume restrictions and allows unlimited rice importation, with a 35-percent tariff on rice imports from members of the Association of Southeast Asian Nations (Asean) and 50 percent from non-Asean countries. This means anyone can import rice, thus, huggle for low prices….But what if the importers will form a cartel?

This takes effect on March 5, with up to P11 billion in import duties expected to be collected during its first year of implementation, the Department of Finance (DOF) said on Tuesday.

Under the law, a P10-billion rice competitiveness enhancement fund will be taken from the tariff revenues to support Filipino farmers for six years.

Beyond control

But global prices cannot be controlled. If foreign rice cartels will jack up their prices, our country will be forced to buy rice abroad for high a price, and makes it un-affordable here bv our people.

Or there will be   possible price manipulation by domestic rice traders. Or the accelerated land conversion by CARP land reform could lessen rice production.

Skeptics say Global rice prices are volatile and can become very high depending on the production  conditions of exporting countries. Rice production [in] Vietnam and Thailand is subsidized and incentivized, making their rice cheap. But they can decide to prioritize local consumption and ban exports, making cheap rice unavailable to Filipino consumers.” Ibon warned.

Palace assurance

But Malacañang has assured farmers that safeguards would be put in place to prevent the misuse of the fund, with the Department of Agriculture (DA) being accountable and responsible for it.

The DA, would work with farmers cooperatives and groups to validate the list of beneficiaries.

The Congressional Oversight Committee on Agricultural and Fisheries Modernization will also conduct a periodic review of the fund.

Dept of Financve   spokesperson Antonio Joselito Lambino II said “the Implementing Rules and Regulations (IRR) of the new law is being crafted to ensure that [there would be no corruption].”