The Cabinet proposal to impose season-based tariffs on rice in lieu of the quantitative restriction (QR) scheme faces rough sailing in Congress, as lawmakers already voiced their concerns over the proposal, particularly for being prone to manipulation by unscrupulous traders.
For one, House Committee on Agriculture and Food Chairman and Party-list Rep. Jose T. Panganiban Jr. of Anac-IP said replacing the QR on rice with season-based tariffs could become an avenue for smuggling.
“If I were to decide, seasonal tariff will not be effective as compared to straight tariff because of unscrupulous importers who tend to withhold importation on lean months, just like what they did to garlic,” Panganiban told the BusinessMirror.
“Also, seasonal tariffication will be easier to manipulate,” he added.
Finance Secretary Carlos G. Dominguez III was the first to float the idea of imposing a tariff of 35 percent during the lean months and 50 percent during harvest season to protect local farmers from import surge, while shielding consumers from price spikes.
Agriculture Secretary Emmanuel F. Piñol later said the proposal of Dominguez is consistent with President Duterte’s order to discourage imports during harvest season.
Panganiban said the proposal of the finance secretary will be discussed in the ongoing technical working group (TWG) meetings to consolidate all the bills amending Republic Act (RA) 8178, as well as the positions of the stakeholders.
The Philippines’s waiver on the special treatment for rice has already lapsed. However, the country in April informed the WTO it was not able to convert its QR on rice into tariff, citing delays in the amendment of RA 8178, or the Agricultural Tarrification Act. Amending RA 8178 is needed to scrap the QR and convert it into tariffs.
Without the amendment, the Philippines needs to enforce reduced rates on agricultural goods covered by the Philippines’s tariff commitments to the WTO.
“Of course, that will be one of the inputs that will be discussed in the TWG, if it would be the official position of the finance department or the economic team of the government,” Panganiban added.
The TWG, he said, has not received “the DOF official position paper on the matter”.
Partly-list Rep. Tom Villarin of Akbayan also expressed reservations on the proposal of the DOF secretary.
“Seasonal rice tariffs mean that we can accurately predict the weather and its impact on rice production. With climate change disturbing cropping cycles and the thinness of global rice production and supply, we cannot sacrifice rice self-sufficiency and making rice tariffication weather-dependent,” he said. “If we impose [seasonal rice] tariffs, it should be to boost local productions as priority, thus it should be at its allowable maximum.”
Panganiban said the TWG will finish and submit the consolidated draft bill amending RA 8178 by August. “The TWG will finish [consolidating the filed bills and positions of stakeholders] by August.”
Earlier Panganiban said the leadership of the 17th Congress has agreed to include in its priority bills measures replacing quantitative import restriction on rice with tariffs.
Panganiban’s House Bill (HB) 5433 also seeks the creation of the rice competitiveness-enhancement fund.
The bill said, “In lieu of the QR, the maximum bound rates committed under the Uruguay Round Final Act shall be imposed on the agricultural products whose quantitative restrictions are repealed by this Act, as amended.”
It also said in case of shortages or abnormal price increases in agricultural products, whose QRs are lifted, the President may propose to Congress revisions, modifications or adjustments of the Minimum Access Volume (MAV); “provided, however, that in the event Congress fails to act after 15 days from receipt of the proposal, the same shall be deemed approved”.
The bill also said in lieu of the QR on rice, the maximum bond rate shall be as notified by the Philippines to the World Trade Organization.
The measure also seek the creation of the rice competitiveness-enhancement fund for rice.
The rice fund shall consist of all duties collected from the importation of the staple under this act, as well as revenues from MAV mechanism for five years from the start of the effectivity of the bill.
Besides Panganiban’s HB 5433, Party-list Rep. Gloria Macapagal-Arroyo of Pampanga and House Committee on Economic Affairs Chairman Arthur Yap of Bohol have also filed two separate bills seeking to place safety nets for Filipino rice producers by imposing tariffs in lieu of QRs on rice imports and to amend the RA 8178, or the Agricultural Tariffication Act.
In HBs 5023 and 4904, Arroyo and Yap want to direct tariff collections from rice imports to projects and programs that enhance rice productivity and increase farmers’ incomes.
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