By Aubrey Rose A. Inosante, Reporter
THE GOVERNMENT must provide direct support to farmers impacted by the reduction of rice import tariffs under Executive Order (EO) No. 62, though the intent of the order serves the greater good by shielding consumers from inflation, former National Economic and Development Authority (NEDA) Secretary Cielito F. Habito told BusinessWorld on the sidelines of a forum last week.
“You’re focused on the farmer. Don’t kill the many consumers by setting tariffs high just because you want to help the farmers get higher prices,” he said.
In June, EO 62 slashed rice import tariffs to 15% from 35% until 2028, citing the need to curb rice prices. The EO is subject to review every four months.
Mr. Habito, who also teaches at Ateneo de Manila, expressed support for keeping tariffs low.
“I would rather go to a rifle solution that will help the farmers in a more direct way that will not cause collateral damage to consumers,” he said, referring to the distribution of hybrid seed and fertilizer in the short term.
Mr. Habito said that over the long term, the most effective way to support farmers is by investing in public goods such as irrigation, farm-to-market roads, post-harvest facilities, and cold chain systems. These improvements will enhance the value chain and ultimately increase farmer incomes.
He also noted that government policies “penalize” the vast majority of Filipinos with policies that protect several million farmers and their families.
“Keeping tariffs will allow prices to go down further notwithstanding weaker peso,” according to Roehlano M. Briones, a senior research fellow with the Philippine Institute for Development Studies, adding that the ideal tariff rate is 0-5%.
On Monday, the peso closed at P58.99 to the dollar, weakening from the P58.87 finish on Friday, the Bankers Association of the Philippines reported.
Samahang Industriya ng Agrikultura Executive Director Jayson H. Cainglet said five months after EO 62 took effect, rice prices remain high, indicating that the objective of EO 62 has not been met.
“NEDA and a few privileged importers/traders that pushed for a blanket tariff reduction must now admit it’s a failure,” he said.
“Boosting production and increasing government support and incentives to rice farmers is the best way to reduce rice prices; and never through tariff reduction,” he said.
Additionally, he called for an increase of at least P30 billion in the National Food Authority’s palay procurement budget to offset the low buying price offered by millers.
Bantay Bigas Spokesperson Cathy L. Estavillo noted that farmers can’t compete with imported rice due to high production costs, and estimated the cost to produce one kilo of palay at P17 due to lack of government subsidies.
“The previous tariff rates before RA 11203 (the Rice Tariffication Law) should be reinstated to protect local production,” she said.
She cited the need for government subsidies, land reform, and post-harvest production support. She also called for 100% free irrigation services for farmers and compensation for calamities.