February 19, 2019

The National Economic and Development Authority (NEDA) is taking the lead in crafting the Implementing Rules and Regulations (IRR) of the recently signed Rice Tariffication Act or RA 11203, ensuring the country’s smooth and timely transition to a new rice regime.

“We laud the signing of the historic Rice Tariffication Act. This ushers in a new rice policy that will set in motion big reforms in the agriculture sector and will ensure the availability of cheaper rice (closer to world prices) in the market,” Socioeconomic Planning Secretary Ernesto M. Pernia said.

Signed by President Duterte on February 14, 2019, the law amends the two-decade-old Agricultural Tariffication Act of 1996 and replaces the quantitative restrictions (QR) on rice imports with tariff.

“We, at NEDA, have always been pushing for key reforms that will make the Filipino staple food accessible and affordable for everyone. We are confident that the full implementation of the law will have the resolute support of everyone,” Pernia said.

In anticipation of the signing of the bill, government agencies started preparing for its implementation as early as January 2019. Technical working groups were created to discuss key provisions of the bill and provide inputs to the draft IRR.

The IRR Drafting Committee has members from NEDA, Department of Budget and Management, Department of Agriculture, and other concerned government agencies.

The first draft of the IRR formulated during a two-day workshop last week was presented to the National Food Authority (NFA) Council on February 18, 2019.

Pernia said the revised draft IRR will be subjected to public consultation in the coming days.

The draft IRR contains provisions on the removal of NFA’s regulatory powers and the streamlining of import requirements. It also provides details on the necessary institutional arrangements that will enhance competitiveness and institute safety nets to assist local farmers affected by the removal of the QR on rice imports.

“Anyone, whether a small or a big trader, can now import as long as they have secured a Sanitary Phytosanitary (SPS) clearance from the Department of Agriculture and paid the corresponding tariff. By removing NFA’s decades-old monopoly on rice importation, we promote greater participation of the private sector and enhance competition in the market,” Pernia said.

He added that safety nets are included in the new law that address concerns of many farmers.

“The law provides sure and transparent support to farmers through a comprehensive assistance program to the tune of at least P10 billion a year for the next six years,” Pernia said.

In particular, the Rice Competitiveness Enhancement Fund (RCEF) will be used to provide key interventions to support farmers and enhance their competitiveness and profitability, including farm machinery and equipment to improve farm operations, rice seed development, propagation, and promotion, expanded rice credit, and extension services.

A portion of the rice tariff revenues in excess of PhP 10 billion will be used to provide direct financial assistance to rice farmers affected by the removal of the QR and for diversification to high-value crops.

A mandatory review of the RCEF will be conducted by Congress on the sixth year.

Pernia said that the law also grants the President the power to increase, reduce, revise or adjust existing tariff rates to safeguard Filipino farmers. In case of imminent danger of rice shortage, the bill empowers the President, for a limited period and for a specified volume, to allow importation at lower tariff rates for the benefit of consumers.

The bill also enables the President to increase the applied tariff to more than 100% (but not to exceed the specified bound rate) if warranted.

Pernia said that a special safeguard duty on rice will also be imposed to protect the rice industry from sudden or extreme price fluctuations. A safeguard duty is a temporary increase in import duty of an agricultural product to deal with import surges or price falls, under the WTO Agreement on Agriculture.

“The new law not only puts in place a new and efficient rice regime but also widens the horizons of productivity and sustainability of the country’s rice sector. With this law, concerned government agencies, including NEDA, are mandated to craft a Rice Industry Roadmap. This development plan will detail strategies related to research, production, and governance mechanisms, among others.”

The law provides a maximum of 180 days from the law’s effectivity date for the formulation and adoption of the Roadmap.