IN the frenzied effort to find ways to stop the fast-rising market prices last year, governĀment economists found one way that quickly helped. They called for the immediate importation of 250,000 metric tons of rice from Vietnam and Thailand to pull down rice prices in our markets. The move succeeded, for rice is the key element in Filipino consumersā market expenses. The report of massive rice imports pulled down rice prices and this in turn pulled down market prices in general.
This is the reason for the Rice Tariffication Bill which President Duterte signed into law last Friday. Previous to the enactment of the law, the amounts of rice imports were strictly controlled so as to protect Filipino rice farmers. Rice imports just had to pay a duty of 25 percent if from an ASEAN state and 50 percent if from a non-bloc member.
With the Rice Tariffication Law, there are no longer any limits on the quantity of imporĀtations. But additional tariffs are imposed ā 35 percent if from an ASEAN state, 50 percent if from a non-bloc member. We can now expect big supplies of low-priced imported rice in our markets.
That should solve the problem of high prices ā or inflation ā which we had last year. It takes care of the nationās consumers. Big imports will boost supply which, in turn, will mean lower prices, under the law of supply and demand.
But it will set back our rice farmers who will not be able to sell their produce in our markets because they cost more than the imported rice. Our farmers have not been able to bring down their production costs, as their fellow farmers in Vietnam and Thailand.
This will now be the next project of the Duterte administration, Secretary Benjamin Diokno of the Department of Budget and Management said last week. Agriculture should be at the core of our national development program but it has not been able to make its proper contribution to national development. In 2018, services accounted for 56.22 perĀcent of the national growth; industry, 34.8 percent; and agriculture, only 8.94 percent.
But for now, let us welcome the Rice Tariffication Law which President Duterte signed last Friday. It may initially hurt our rice farmers but it should challenge them to do better to match the production capabilities of their fellow farmers in Vietnam and Thailand.
The Rice Tariffication Law should avert a recurrence of our difficulties last year when inflation rates soared to new heights ā to 4.5 percent in May, to 5.7 percent in July, to 6.4 percent in August, to 6.7 percent in September. It is now down to 4.4 percent. Let us keep it that way.
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