research paper about rice tariffication law

The Sectoral Impact of the Rice Tariffication Law on Filipino Rice Supply: A Time-Series Analysis

• Aaron Benjmin Alcuitas University of San Jose-Recoletos, Cebu City, Philippines https://orcid.org/0009-0008-6413-1700
• Josephine Petralba University of San Jose-Recoletos, Cebu City, Philippines https://orcid.org/0000-0002-3943-8793

The Rice Tariffication Law was implemented in March 2019 to address rice shortage by replacing quantitative restrictions with import tariffs. Prior studies have evaluated its various impacts, but no study has analyzed post-RTL seasonal rice supply data by sector. This study is a quasi-experimental, interrupted time-series analysis using ARIMA models applied to 2011-2020 data. The control group consists of observed values and the experimental group consists of ARIMA-forecasted values post-RTL. Research findings indicate that RTL does not affect rice supply trends in the overall rice supply and household sector. Conversely, in the commercial and NFA sectors, RTL has been observed to significantly influence rice supply trends. This reveals the ways in which RTL altered the dynamics within these sectors, thereby impacting their respective supply trends by influencing local production, buffer stock, and importation. The actualization of RCEF, buffer stock increase, and the development of plans to enhance agricultural sustainability are recommended.

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Department of Agriculture. (2019). DA bulletin no. 1 on rice: Understanding the rice tariffication law (RTL) or RA 11203. https://www.da.gov.ph/understanding-the-rice-tariffication-law-rtl-or-ra-11203-and-its-ramifications/

De Vera, B. O. (2022). Diokno to Bongbong Marcos: Don’t scrap rice tariffication law. Philippine Daily Inquirer. https://business.inquirer.net/352556/diokno-to-bongbong-marcos-dont-scrap-rice-tariffication-law

Estadilla, R. J. C. (2022). Economic impacts of rice tariffication law on the Philippine rice domestic market. Journal of International Society for Southeast Asian Agricultural Sciences, 28(1), 76-92. http://issaasphil.org/wp-content/uploads/2022/06/7.-Estadilla-2022.-Rice-Tarification-Law-FINAL.pdf

Evangelista, A. (2018). A staple problem: History of rice crisis in the Philippines. Rappler. https://www.rappler.com/newsbreak/iq/212410-history-rice-crisis-philippines-yearend-2018/

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Gudmalin, C., Perante-Calina, L., Balbosa, J., Mangahas, J., & Samoza, M. A. (2021). Protecting the poor and vulnerable against the pandemic. ADBI Research Paper Series. https://www.adb.org/publications/protecting-poor-and-vulnerable-against-pandemic

Gutierrez, M. A., Paguirigan, N. M., Raviz, J., Mabalay, M. R., Alosnos, E., Villano, L., Asilo, S., Arocena, A., Jr., Maloom, J. & Laborte, A. (2019). The rice planting window in the Philippines: An analysis using multi-temporal SAR imagery. The International Archives of the Photogrammetry, Remote Sensing and Spatial Information Sciences, 42, 241-248. https://doi.org/10.5194/isprs-archives-XLII-4-W19-241-2019

Neo, P. (2018). Philippine rice crisis escalates as shortages push prices to a three-year high. Food Navigator Asia. https://www.foodnavigator-asia.com/Article/2018/08/30/Philippine-rice-crisis-escalates-as-shortages-push-prices-to-a-three-year-high

Philippine Rice Research Institute. (2019). Rice tariffication law. https://www.philrice.gov.ph/wp-content/uploads/2019/09/RCEF_FAQ02-RiceTariff.pdf

Philippine Statistics Authority. (2016). Rice and corn stocks inventory June 2016. https://psa.gov.ph/sites/default/files/csd/2022-12/memo_june2016.pdf

Schaffer, A. L., Dobbins, T. A., & Pearson, S. A. (2021). Interrupted time series analysis using autoregressive integrated moving average (ARIMA) models: A guide for evaluating large-scale health interventions. BMC Medical Research Methodology, 21(1), 1-12.

Tobias, A. M. (2019). The Philippine rice tariffication law: Implications and issues. Food and Fertilizer Technology Center for the Asian and Pacific Region. https://ap.fftc.org.tw/article/1372

Vertudes, M. F., Musa, C. D., Cosilet, M. A., Salagubang, R., & Balaria, F. (2020). Impact of rice tariffication law in selected rice farmers in Nueva Ecija, Philippines. International Journal of Advanced Engineering, Management and Science, 6(3), 147-153. https://dx.doi.org/10.22161/ijaems.63.7

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Rice Tariffication, Good Governance, and Real Food Security

ASOG WORKING PAPER 19-003

17 Pages Posted: 1 Apr 2019

Ronald U. Mendoza

Ateneo De Manila University - Ateneo School of Government

Ayn G. Torres

Ateneo School of Government - Ateneo de Manila University

Date Written: March 1, 2019

With the lifting of the quantitative restrictions on rice imports, the Philippines is expecting an inflow of rice to enter in the next few months. Although this is expected to lead to a decrease in rice prices, this could similarly put pressure on some farmers’ incomes to the extent that they face stiffer competition from imported rice. This study seeks to identify the opportunities and options for the Philippines’ rice farmers in light of the implementation of the Rice Liberalization Act of 2019. The study analyzes the governance challenges the country’s agricultural sector has been facing, and the financial mechanisms and policies that will be necessary in order to support farmers in specific ways. To enhance the competitiveness of the domestic rice and agricultural industry as part of a broader strategy of adjustment, capacity building for collective action between government agencies and other stakeholders is essential. Furthermore, the study emphasizes that in order to attain real growth and food security for the country, we should start looking at our farmers as partners, and not as beneficiaries.

Keywords: rice tariffication, rice liberalization, Philippine agriculture, rice farmers, governance challenges, food security, agriculture competitiveness, diversification mechanisms

JEL Classification: Q13, Q18, O38

Suggested Citation: Suggested Citation

Ronald U. Mendoza (Contact Author)

Ateneo de manila university - ateneo school of government ( email ).

Katipunan Road Loyola Heights Quezon City, 1108 Philippines

Ateneo School of Government - Ateneo de Manila University ( email )

Pacifico Ortiz Hall, Fr. Arrupe Road Social Development Complex, Loyola Heights Quezon City, Manila 1108 Philippines

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The philippine rice tariffication law: implications and issues.

The Philippine rice sector has always been the center of government agricultural policies. The focal points of the policies revolve around promoting food self-sufficiency, providing high income to rice farmers while making prices affordable to the consuming public. The accession to WTO provided for the revision of the quantitative restrictions (QRs) and reduce tariff protection. Rice was exempted from tariffication. The Philippines opened up imports on rice under a minimum access volume (MAV) which is in operation equivalent to QRs. The QR regime mandated for conversion into tariff protection from 2005- 2012 and a waiver to maintain QR up to June 30, 2017. The Philippines’ membership to the WTO for 24 years aimed to counter the impact of the expected influx of cheap rice imports. The Rice Tariffication Law signed into law by President Rodrigo Duterte on February 14, 2019 amends the Agricultural Tariffication Act of 1996 that imposed tariff to agricultural imports except for rice.  The law was prompted because of the surging inflation of rice price during the last quarter of 2018 after the rice stocks of NFA ran out. As Filipinos continue to struggle with inflation, the government found ways to temper rising inflation.

Overview of Philippine rice industry

The Philippines became self-sufficient in rice in the 1970s and was a rice exporter to neighboring countries such as Indonesia, China, and Myanmar. However, with the rapid increase in population and limited land resources to produce the total rice requirement, the country slowly turned into a net rice importer. The Philippines is the second largest rice importer in the world next to China (Simeon, 2019). In 2017, the country imports rice mainly from Vietnam (52%) and Thailand (29%) (Santiago, 2019).

Rice is a highly political commodity because it is the country’s main staple. It has always been the center of government agricultural policies. The focal points of the policies revolve around promoting food self-sufficiency, providing high income to rice farmers while making prices affordable to the consuming public (Tobias et al. , 2011)

The Philippines in the WTO

In 1995, the Philippines acceded to the WTO with the premise of revising QRs and reduce tariff protection. Rice, however, was exempted from tariffication. The Philippines opened up imports on rice under a minimum access volume (MAV) which is in operation equivalent to Quantitative Restrictions (QRs). The QR regime of the Philippines was mandated for conversion into tariff protection. The country obtained a special treatment for rice up to 2005, which was later on extended until 2012. The Philippines has been applying for extensions of QR on rice since 1995. Eventually, the Philippines acquired a waiver to maintain QR up to June 30, 2017.

The Philippines’ membership to WTO for 24 years aimed to counter the impact of the expected influx of cheap rice imports. The country apparently has been extending protection primarily to safeguard the local rice farmers from increased competition of imported rice. Another reason the Philippines had been pushing for a two-year extension of the restriction is to achieve rice self-sufficiency by 2020.  However, given that QR on rice shall be retained, consumers shall continue to bear the burden of overpriced rice, with the poorest households bearing the burden. Based on the 2012 Family Income and Expenditure Survey, the richest 20% of households only devote 3% of their spending on rice while poorer income groups tend to allocate greater share for rice (PIDS, 2012).

THE RICE TARIFFICATION LAW

The Rice Tariffication Law titled “An Act liberalizing the importation, exportation, and trading of rice, lifting for the purpose the quantitative import restriction on rice, and for other purposes” was signed into law by President Rodrigo Roa Duterte on February 14, 2019. This is also known as the Rice Liberalization Act or Republic Act No. 11203, which amends the Agricultural Tariffication Act of 1996 that imposed tariff to agricultural imports except for rice. Primarily, the law aims to lift the quantitative restriction (QR) on rice imports and replace it with a general tariff.  The Agricultural Tariffication Act of 1996 served as the Philippine government’s compliance to our obligation to WTO, lifting QRs and imposing tariff to agricultural products. The law aims to protect local farmers from the entry of more imported rice into the country through the imposition of 35% tariff on rice coming from member-countries of the Association of Southeast Asian Nations (ASEAN) like Thailand and Vietnam. For non-ASEAN countries, 40% tariff is imposed. The collected tariffs will be used to fund mass irrigation, warehousing, and rice research.

Objectives of the tariffication law

• Fulfill our international commitment when we joined the World Trade Organization in 1995. Replace the QR on rice with another form of protection that is more transparent and generate revenues to support the sector – or a tariff.
• Ensure the availability of rice in the domestic market for the accessibility of greater majority of the population by allowing more private traders (big or small) to participate in importing rice.
• Lower domestic rice prices to levels that would be affordable to greater majority of the population.         
• Make domestic market function effectively and efficiently with much reduced/no government intervention.
• Provide farmers equivalent protection with the imposition of 35 % or higher tariff rates on rice imports and preferential assistance to rice farmers, adversely affected by tariffication.
• Provide opportunity for farmers to earn more in the world market. The law also lifted the restriction on rice exports to encourage farmers to produce much better quality heirloom/ traditional rice geared to exports.

Key provisions of the rice tariffication act

• Tariffication . Tariffs are set at 35% tariff rate on all rice imports from ASEAN countries, and a 50% tariff on all imports from non-ASEAN countries.
• Lifting of quantitative restriction on imports and exports. Removal of the QR will also increase imports and depress “palay” prices.
• Powers of the President. Upon the recommendation of NEDA and as advised by the National Food Authority Council (NFAC), the President “may increase, reduce, revise or adjust existing rates of import duty up to the bound rate” of rice tariffs. In case of “imminent or forecasted shortage,” the draft IRR provides that the President may allow the importation of rice at a lower applied tariff “for a limited period and/or specified volume” to address the situation.
• 50% will go to the Philippine Center for Postharvest Development and Modernization (PhilMech) to provide farmers with rice farm machineries and equipment;
• 30% will be released to the Philippine Rice Research Institute (PhilRice) to be used for the development, propagation and promotion of inbred rice seeds to rice farmers and the organization of rice farmers into seed growers’ associations engaged in seed production and trade;
• 10% will be made available in the form of credit facility with minimal interest rates and with minimum collateral requirements to rice farmers and cooperatives to be managed by the Land Bank of the Philippines and the Development Bank of the Philippines; and
• 10% will be set aside to fund extension services by PhilMech, Agricultural Training Institute (ATI), and the Technical Education and Skills Development Authority (TESDA) for teaching skills on rice crop production, modern rice farming techniques, seed production, farm mechanization, and knowledge/ technology transfer through farm schools nationwide.
• Rice industry road map. The Department of Agriculture (DA), together with relevant agencies, will have to formulate a Rice Industry Roadmap to spell out the critical interventions that need to be put in place to assist the small rice farmers, especially those that will be most affected by the tariffication. DA Secretary Emmanuel Piñol issued Special Order No. 358 which created a National Rice Roadmap Team.
• Issuance of Sanitary and Phytosanitary Import Clearance for Rice for the Sole Purpose. The law allows unlimited importation of rice as long as private sector traders secure a phytosanitary permit from the Bureau of Plant Industry and pay the 35% tariff for shipments from neighbors in Southeast Asia. This covers even rice importation for the purposes of donation during calamities and emergency situations. In these instances, the agency/office/organization or private entities, if they are based in the Philippines, will be required to secure phytosanitary import clearances (SPSIC).
• National Single Window Program . A proposed measure the setting up of a single window system for rice by the Bureau of Customs to address rice smuggling.
• Exclusion and transfer of the regulatory function of the National Food Authority (NFA) to the Bureau of Plant Industry (BPI). NFA will retain its power to maintain a rice buffer stock which will be used in emergency situations and to sustain the government's disaster relief programs. Rice for this purpose will be sourced solely from local farmers.
• Special Rice Safeguard. The Implementing Rules and Guidelines (IRR) provides for a Special Rice Safeguard to help protect local rice farmers from sudden or extreme price volatilities. These will be imposed in accordance with RA 8800 or the Safeguard Measures Act and its IRR.
• Priority beneficiaries of mechanization. There are 1,100 producing towns that have been identified as priority beneficiaries of mechanization in the form of tractors, transplanters, harvesters, dryers, and rice milling equipment.
• Rice Farmer Financial Assistance program . Focuses on rice farmers, cooperatives, and associations adversely affected by rice tariffication. Also allocates tariff revenues in excess of Php10 billion to the Rice Farmer Financial Assistance program to compensate rice farmers who will lose income as a result of the measure. A portion of the excess tariff will be allocated to titling rice lands, expanded crop insurance, and crop diversification program.

Rice tariffication and inflation

The newly approved Rice Tariffication Law, approved by Congress on November 2018, will remove the National Food Authority’s (NFA) power to import and distribute cheaper rice. With Senator Cynthia Villar as the principal author, the measure was prepared jointly by the Committees on Agriculture and Food, on Ways and Means, and on Finance. It is in substitution of Senate Bill Nos. 1476, 1689, 1839, taking into consideration Proposed Senate Resolution Nos. 143, 146 and House Bill No. 7735, with Senators Ralph Recto, Leila De Lima, Joel Villanueva, Risa Hontiveros, Grace Poe, Sherwin Gatchalian and Cynthia Villar as authors.              

Pres. Rodrigo Duterte signed into law the Rice Tariffication Bill which was imposed recently on March 5, 2019. The law was prompted because of the surging inflation of rice price during the last quarter of 2018 after the rice stocks of NFA ran out. Further, according to Philippine Statistics Authority (PSA) data, rice was the number one contributor to inflation in September 2018, while food items in the consumption basket accounted for more than half of the inflation rate in the same month.  Consumers bought regular-milled rice at an average price of Php 37.89/kg (US$ 0.72/kg) and well-milled rice at Php 41.93/kg (US$ 0.80/kg). Prices of rice have continued to go up since then. Farmers enjoyed the highest buying price for “palay” which was recorded at Php 22.00/kg. The rise in rice prices, both at the farm-gate and retail levels, contributed significantly to inflation. As Filipinos continue to struggle with inflation, the government found ways to temper rising inflation. One way of doing it is by passing the Rice Tariffication Bill.

On the other hand, according to the National Economic and Development Authority (NEDA), rice tariffication will directly benefit farmers and the poor through lower rice prices and increased government assistance to the agricultural sector. The newly-signed law provides for the establishment of the Rice Competitiveness Enhancement Fund (RCEF), which will pipe in Php10 billion (US$ 190.84) annually to the rice sector for the next six years. The RCEF is allocated for the procurement of farm machinery and equipment, rice development, propagation and promotion, as well as expanded rice credit and extension services.

Meanwhile, the NEDA is taking the lead in crafting the Implementing Rules and Guidelines (IRR) of the Rice Tariffication Law along with the Department of Budget and Management, Department of Agriculture, and other concerned government agencies to ensure the country’s smooth transition to a new rice regime. This draft IRR takes into account the feedback and concerns brought up by various stakeholders during the drafting of the bill and after it was signed into law.

The following sections present the objectives, key provisions and possible implications and issues associated with the enactment of the Rice Tariffication Law.

Effects of rice tariffication

• Lower retail prices for consumers. Possible savings for the consumers as it allows no limit in terms of the volume of imports which will eventually stabilize prices. However, in the long run, the economy could benefit more from the adoption of import tariffs than implementation of QRS which limit the entry of commodities and may lead to unstable prices.
• Address the rice shortage. Would address the urgent need to improve availability of rice in the country, prevent artificial rice shortages, reduce the prices of rice in the market, and curtail corruption and cartel domination in the rice industry.
• Lower inflation rates. The law will also reduce government's role in rice importation and lead to more rice imports by the private sector, thus, lowering rice prices and help tame inflation.
• Interventions to support rice farmers. RCEF will 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. Likewise, it will open up a window for farmers to export and contribute to the world market.

Negative                      

• New law lacks safety nets for Filipino farmers . Farmer groups clamor that the new law will make them compete with cheap rice imports, making them more penniless. Measures should be in place to ensure that Filipino farmers will not suffer with the rice tariffication law and that "safety nets" are available for farmers.  While it has its good points, the lack of government regulation worries stakeholders.
• Millers. There are around 6,600 registered rice millers all over the country, employing 55,000 workers. Industry stakeholders, in a position paper, said that a complete milling facility costs from Php 30 million (US$572,519.08) to Php 50 million (US$954,198.47) 1  . This would place the value of the whole industry itself at Php200 billion (US$ 3.82 billion) to Php300 billion (US$ 5.73) ( (Orly Manuntag, Confideartion of Grains Retailers Association of the Philippines).
• Animal feeds and beer industry. A by-product of the rice milling process, the rice bran is used for making animal and aquaculture feeds. A shortage in local unhusked rice production would also mean there would be a drop in its by-product.  If feed mills produce less, it would cause a possible increase in the prices of pork and chicken which use rice bran as major ingredient for its feeds. Another by-product which comes from the milling process is the brewer's rice or “binlid” which is used in manufacturing alcoholic drinks, particularly beer.
• Biomass, construction industry. A drop in local rice output will also mean a decrease in rice hull, which is used as fuel for biomass furnaces used in the provinces to provide electricity. Rice hulls are also used as a binder for cement and land fillers (Orly Manuntag, Confideartion of Grains Retailers Association of the Philippines).
• Enable cartels of the rice trade and will throw poor sectors into a worsened state of hunge r. There is no guarantee that retail rice prices will be lower in the long run with unhampered importation. Relying on rice imports makes the country vulnerable to higher world market prices as well as to rice production and export decisions of other countries. In 2008, for instance, Vietnam, India and Pakistan restricted their rice exports amid rising global rice prices. Thailand also raised the idea of creating a global rice cartel similar to that for oil exporting countries.

Some salient issues on rice tariffication

• Rice imports are cheaper than domestically produced rice. Under a free market, the market price of rice will decline with the influx of cheaper rice imports.
• Liberalizing rice imports will help, but will not solve the Philippines' inflation problem.
• Tariff are set at 35% tariff rate on all rice imports from ASEAN countries, and a 40% tariff on all imports from non-ASEAN countries. However, some experts claim these tariff rates are still too high, and lower rates (10% to 20%) might be more feasible in keeping with the central goal of making rice more affordable for Filipinos. While this will result in imported rice becoming more expensive, the flood of imported grains will still threaten local produce and worse, affects the farmers.
• To ensure that the rice to be imported will not be infested by pathogens or pests like bukbok (weevils), the new law requires that all private players secure “sanitary and phytosanitary import clearances” from BPI before they can import. Past experience tells us that this could be prone to abuse (Dr. Ramon Clarete, University of the Philippines School of Economics).
• The Rice Fund will be put to better use if it were focused instead on improving rice farmers’ access to credit and crop insurance (Dr. Emil Q.  Javier, National Academy of Science and Technology).

CONCLUSION AND RECOMMENDATION

Much has been said on the ratification of the Rice Tariffication Act. However, the main concern is the negative impact of the rice tariffication law on local farmers, saying that the “over supply” of cheap rice could adversely affect them following its implementation. On the other hand, the law is seen to help expand the access of Filipinos to cheap rice that in return will prevent inflation pitch brought in large part by the supply. Nevertheless, the core concern of the government should be on how to prevent 2.4 million rice farmers and farm workers from getting poorer because of the implementation of the new law. Although special key provisions are already laid out to protect the farmers and the consumers, the focus is on the proper implementation so that everyone should benefit from the law. 

The newly-signed law provides for the establishment of the Rice Competitiveness Enhancement Fund (RCEF), which will pipe in Php10 billion (US$ 190.84 million) annually to the rice sector for the next six years. The RCEF is allocated for the procurement of farm machinery and equipment, rice development, propagation and promotion, as well as expanded rice credit and extension services. RCEF is a package of support programs to help the farmers and serve as safeguard to cushion the sudden effects of inflation. However, it is imperative that DA to strongly support the local rice industry and diligently perform its mandated functions in identifying eligible beneficiaries which include farmers, other farm workers, rice cooperatives and associations. Most importantly, in crafting the IRR, research and development should be highlighted since it has been proven to help develop improved technologies and increase farmers’ income.

House of Representatives. An Act liberalizing the importation, exportation, and trading of rice, lifting for the purpose the quantitative import restriction on rice, and for other purposes. Retrieved from   http://www.congress.gov.ph/legisdocs/ra_17/RA11203.pdf

National Economic Development Authority. Implementing Rules and Regulations of the Rice Liberalization Act - AmBisyon Natin 2040. Retrieved from http://2040.neda.gov.ph/public-consultation-for-the-drafting-of-the-impl...

Punongbayan, JC. “[ANALYSIS] Will Rice Tariffication Live up to Its Promise?” Rappler. Retrieved from www.rappler.com/thought-leaders/218393-analysis-will-rice-tariffication-live-up-to-promise .

Santiago, D. Philippines Rice Imports by Country. Retrieved from http://www.philippinesaroundtheworld.com/philippines-rice-imports-by-cou...

Tobias A, Molina I, Valera HG, Mottaleb KA, Mohanty S. 2012. Handbook on rice policy for Asia. Los Baños (Philippines): International Rice Research Institute. 47 p.

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Rice Tariffication Law: Education and Views of Farmers in the Southern Philippines

• Jamil Nueva , Jenny Ann Tanaleon , A. Besa
• Published in ASEAN Journal of Science and… 10 February 2022
• Agricultural and Food Sciences, Education, Law

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MODELING PROFITABILITY IN RICE FARMING UNDER PHILIPPINE RICE TARIFFICATION LAW: AN ECONOMETRIC APPROACH

2022, Scientific Papers Series Management, Economic Engineering in Agriculture and Rural Development

This research study aimed to elucidate the significant predictors of profitability in rice farming under the implementation of the Rice Tariffication Law (RTL) in the Philippines. Data from 177 rice farmers in Hilongos, Leyte, Philippines were analyzed using descriptive analysis and econometric modeling. Results showed that the profitability of rice farmers is decreasing since the implementation of RTL in the country. This happens because of a large supply of rice (imported) in the country which resulted in a decrease in farmers' produce rice marketability price. Meanwhile, the agricultural inputs during RTL are also high. The econometric model has revealed that there are only a few significant predictors of profitability in rice farming during the implementation of RTL such as leisure time (p-value=0.076), perception of government (Scale of 1 to 10; p-value<0.001), and farm assets (p-value<0.001). Conclusively, farmers must reduce their allotted time for unnecessary leisure activities and engage more in productive farming activities to increase economic profit amid the promulgated RTL. The results suggested that government support and development program is needed for the poor farmers' sustainability especially in rural areas to continue during the implementation of RTL. The local government must take an initiative to form farmers' associations and cooperatives to provide for farmers' needs and can access credit for farm inputs. Furthermore, the government must provide training and seminars for farmers concerning RTL to become aware and knowledgeable about the pros and cons of the policy.

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Rice is the most important crop grown in the Philippines since it is an essential food and a source of income for many Filipinos. The study’s purpose is to determine the various influencing factors affecting the rice production of small-scale farmers in Albuera, Leyte, Philippines. Using Slovin’s formula, a total of 73 rice farmers were randomly selected as respondents to the survey. Some descriptive techniques were employed to summarize the different variables. A categorical relationship analysis using a Chi-square test was used to analyze the significant factors of rice production. Results showed that about 57.53% and 42.47% of the farmers are experiencing low and high production levels, respectively. On average, rice farmers are &quot;moderately affected&quot; (M=23.00, SD=4.55) by the different constraints in the rice production process from planting to harvesting. In addition, farmers are &quot;uncertain&quot; (M=19.67, SD=3.01) about the effectiveness and usefulness of extens...

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This study was conducted to analyze the profitability of rice farming in Bangladesh. In doing so, it utilized the multistage sampling technique to collect the cross-sectional data from seven rice producing districts in Bangladesh during 2016. A total of 140 samples were directly interviewed using a structured questionnaire for achieving the purpose. Apart from the descriptive analysis of the socioeconomic variables of the selected respondents, the benefit-cost and functional profitability analysis of rice were also performed. The log-linear form of Cobb-Douglas production function was chosen to determine the effects of various inputs on the profitability of rice. The finding of cost-benefit analysis reveals that rice farming is a profitable activity in Bangladesh as the estimated cost of production was lower than the return in the selected study areas. However, the profitability differs among different farmers’ group and large farmers are more profitable in rice cultivation than sma...

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Increasing rice productivity and quality is sustainable efforts carried out continually. Socio-economic farmer’s characteristics, profits and efficiency study in using production inputs on rice farming was successfully carried out using survey method from 30 farmers with structured questionnaire sampled randomly in Jetis sub-district, Karanganyar district, Central Java. Data analysis was done using descriptive statistics, profit analysis and production function. The results showed that rice farming at Karanganyar district, uniquely, was supported by productive age of farmers with more than 20 years’ experiences and 86.7% of family labor. Revenue cost ratio (RCR) of the rice farming was high up to 2.26 mainly influenced by farm size, urea fertilizer and labor. Though the rice farming had high RCR, the farming was still backed up by not efficient yet and inefficient status of production inputs, except labor. Collaboration of farmers, local-national government and utilization of techno...

ASEAN Journal of Science and Engineering Education

ADONIS SOLIDARIOS BESA

Peter Kulyakwave

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Australian Journal of Agricultural Economics

Kaliappa Kalirajan

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Today’s front page, Thursday, September 19, 2024

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Government think tank finds limited impact of RTL on prices, productivity

• BusinessMirror Editorial
• September 18, 2024
• 2 minute read

The Congressional Policy and Budget Research Department (CPBRD) released a paper in May, which evaluated the impact of the Rice Tariffication Law (RTL) on prices and productivity. The government think tank noted that retail prices for all types of rice gradually declined until 2021. That year, regular-milled rice was cheaper by P5.09/kg compared to the 2018 level.

In terms of farmers’ productivity, CPBRD noted that the national average yield improved to 4.05 metric tons per hectare from the 2018 level of 3.97 mt/ha. In 2023, farmers produced an average of 4.17 mt/ha of rice, the highest since the RTL was implemented. During the same period, irrigated and non-irrigated areas recorded yield production of 4.51 mt/ha and 3.34 mt/ha, respectively.

Despite these improvements in yield, the Philippines continued to import rice in huge quantities. The country is expected to again become the world’s largest rice importer this year, according to the projection made by the United States Department of Agriculture (USDA). Imports typically bridge the production gap for the private sector to beef up their inventory as the government is now prohibited to import rice.

A paper published by the University of Asia and the Pacific’s (UA&P) Center for Food and Agribusiness (CFA) that also assessed the rice interventions put in place by the government under RTL indicated that the law failed to make a significant impact on productivity and farm efficiency. (See, “UA&P: Rice interventions didn’t have dent on industry,” in the BusinessMirror, September 9, 2024). The center attributed this to “frequent changes in leadership, lack of continuity of programs, slow adoption of high-yielding varieties and modern agronomic technologies, costly farm labor with still low usage of mechanization and post-harvest facilities, and low milling efficiency.”

In a separate paper, the CPBRD noted that data from the Philippine Statistics Authority strongly suggests that the RTL and the Rice Competitiveness Enhancement Fund (RCEF) “have not altered the trajectory of the Philippine rice industry in any meaningful way.” CPBRD said there was no “appreciable increase in productivity” in the domestic rice sector in the years following the implementation of the RTL and RCEF. Its analysis of the data from the Philippine Statistics Authority in 2019 to 2022 showed that the compound annual growth rate (CAGR) for irrigated palay reached only 1.07 percent versus the 2.37 percent recorded in 2000 to 2018, prior to the enactment of RTL.

Our citizens are calling for improved outcomes from the government, especially from the agencies involved in implementing the interventions aimed at improving rice productivity and increasing farmers’ income. Billions of pesos have already been poured into the rice sector and it will get more resources if Congress will approve the amendments to the RTL, including the increase in and the extension of the life of RCEF. Further delays in rolling out interventions outlined by RTL will only make it more difficult for this administration to make good on the President’s promise to significantly reduce prices.

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