[Statement] R.A 11203 will lambast the Philippine economy backbone -PNFSP

R.A 11203 will lambast the Philippine economy backbone

We rise in behalf of the farmers and consumers who will be affected by the rice liberalization law, putting their right to food safety and food security in jeopardy, as yesterday, March 5, marked the start of rice liberalization in the country, after R.A 11203 known as the Rice Tariffication Law was officially introduced to the public through its Implementing Rules and Regulation (IRR). There’s no assurance that this may address food shortage given that the vitality of the world market itself is fluctuating yearly. And has no assurance that the rice Filipinos will eat is safe as it may be genetically modified (GMO’s) or contaminated.

Instead, this approach of the government will de-stabilize commodity prices and the economy as a whole leaving ordinary Filipinos behind, while big traders may enjoy importing 1,185,764 metric tons of rice based on NFA’s list of Out-Quota Rice Importation of the Private Sector as of January 18, 2019. With the passage of the Rice Tariffication Law, the expected volume of rice imports may reach to almost 4 million MT, the highest volume of rice imports surpassing the 2010 importation of 2.45 M MT.

According to President Duterte’s economic managers, the law will bolster local rice supply and produce revenues to enhance local Philippine rice industry. The feasibility of bolstering local rice supply and producing revenues lies on the narrative that “the new law completely abolishes quantitative restrictions (government control) to ensure a steady supply of rice in the domestic market through importation.” Yet, higher and unregulated tariff rates would be smacked on imports. The tariffs, set at 35%, would now serve as the control mechanism instead of an explicit limit on imports through quantitative restrictions. But, these are all short-sighted analogy including the 10 billion pesos (RCEF) that will use annually to develop the local rice industry.

Rice influx may affect rice producing provinces. It would imperil rice granaries provinces that include Nueva Ecija, Isabela, Pangasinan, Cagayan, Iloilo, Camarines Sur, Aurora, Bataan, Bulacan, Nueva Ecija, Pampanga, Tarlac, and Zambales. In 2017 Central Luzon contributed 0.6% from the 6.7% growth of the Gross Domestic Product. Under the law, market forces, not government interventions, will prevail, but it seems that the production is not. In economic theory, competition will bring prices down.

The implementation of Rice Tariffication Law is a big slap to the country’s program on agriculture and the capacity to uphold food security and self-sufficiency. Instead of strengthening the agricultural and peasant sector by pursuing genuine agrarian reform and rural industrialization, the government has just abandoned its role and practically opened the country to foreign interest. The policy of liberalizing the country’s agriculture, the rice industry, and the economy, are assaults to the country’s sovereignty. There are better and more appropriate parameters to reform the rice and agriculture industry such as the passage of the Rice Industry Development Act (RIDA) and the Genuine Agrarian Reform Bill (GARB).

For reference:
Renmin Vizconde
Executive Director

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