ECO110 Midterms Activity

Valdez, Jim Charles V.

Salvador, Lucas Zatch
Macababbad, Osias Dielle V.
An Analysis of The Rice Tariffication Law (RA 11203)
Introduction
The Philippines is a country that heavily depends on the importation of rice despite being an
agricultural nation. Rice is a main staple of Filipino cuisine, a variety of dishes and delicacies of
the Filipino people have either rice as the main ingredient or accompanied by it. The Philippines
is gifted with good soil and climate for rice cultivation as a tropical country. The country was
once self-sufficient in rice in the 1970s and was even a rice exporter to neighboring countries.
However, with the rapid rise in population and limited land resources to produce the total rice
requirement, the Philippines gradually turned into the leading importer of rice (Tobias, 2019).
Although, local rice farmers still produce rice all year round. Despite this local production, the
country heavily relies on rice imports to meet the high demand for rice as the country is no
longer self-sufficient in rice production. In fact, according to the Statista Research Department,
the Philippines is one of the biggest rice importers in the world, ranking first followed by China.
During the 2022-2023 marketing year, the Philippines imported 3.8 metric tons of rice, making it
the clear leader in rice imports worldwide. Various factors contribute to the need for the country
to import high amounts of rice despite local production. The Philippines is one of the leading
consumers of rice in the world, ranking among the top 10 countries worldwide, with the country
not being self-sufficient in rice production, the necessity for rice importation is crucial. Another
reason for the high number is climate change, in recent years the effects of El Nino on domestic
rice production continued to worsen. To anticipate this, the government imports rice to meet the
demand when production locally will not be able to keep up.

The price of rice in the country continues to rise, with the depletion of rice stocks, the
over-reliance on rice imports, and inflation, millions of Filipinos continue to struggle to buy rice at
inflated prices. In response to this, the government enacted the Rice Tariffication Law to
counteract the surging inflation of rice prices (Acquitas and Petralba, 2023) and assist rice
farmers in becoming more globally competitive in the global rice market to deter the need for
rice importation.

Rice Tariffication Law (RA 11203)

● The Implementation of RTL
- The rice tariffication law or Republic Act No. 11203 was signed on Feb. 14, 2019 by
President Rodrigo Duterte. The Rice Tariffication Act amends the Agricultural
Tariffication Act of 1996 (RA 8178). The law replaces the system of quantitative
restriction (QR) on rice importation with a purely tariff system. The system of
quantitative restriction refers to the allowable amount or quantity of goods that may
be imported to the country, restricting trade of the good when this certain limit is
 reached, whereas a tariff system involves imposing a tariff or tax each time goods
are imported to lessen the reliance on other countries.
- This economic policy is an example of both a Trade Policy and Regulatory Policy.
This law was implemented by the government to affect the number of rice imported
into the country to benefit the domestic rice industry and help local rice farmers to be
more competitive in the global market for rice. Through the use of regulation and law,
the government hopes that this rice tariffication law can improve the economy and
benefit the state of agriculture, specifically the rice industry.
- This law was enacted to address the issues of rice shortage and the continued rise in
the prices of rice in the country.
- The implementation of the law will result in the creation of the Rice Competitiveness
Enhancement Fund (RCEF) or Rice Fund which will be used to improve rice farm
machinery and equipment, rice seed development, and other services related to rice
farms. The goal of this fund is to develop the rice farming industry of the country to
become more globally competitive.
- The law was enacted as the rice tariffication was supposedly seen as a win-win
situation for rice farmers because they would have access to cheap, affordable, and
high-quality rice and receive government support to improve their productivity
through the Rice Fund which would improve the agricultural sector by making us
more globally competitive.
- Finance Secretary Carlos Dominguez III, a former Agriculture Secretary stated that
the law is an opportunity to revolutionize the agriculture sector and help farmers to
become more competitive in the global economy.
● Current Data
- According to the Department of Finance, in the first three years of its implementation,
the law liberalizing rice trading has earned a total of P46.6 billion in rice import
duties, which directly benefited palay farmers through a P10-billion annual fund
created to finance programs that will sharpen their global competitiveness by way of
farm mechanization, high-quality seeds, access to credit and training.
- Data from the Department of Agriculture show that since the implementation of the
RCEF, more than one million rice farmers have received over 8.6 million bags of
certified inbred rice seeds, which are proven to be higher yielding than traditional
home-saved seeds.
- Over 830,00 hectares of palay farms nationwide are now yielding more rice than
before since the implementation of the RCEF.
- With RCEF, 950,000 farmers have access to 19,542 units of farm machinery
equipment. Over 90,000 rice farmers have benefited from 4,978 batches of training
sessions; and 14,459 specialists, trainers, and extension intermediaries have
received training on modern rice farming techniques.
● Current Views on RTL
- The Rice Tariffication Law has been a contentious issue among policymakers,
consumers, and farmers since its implementation (Acquitas and Petralba, 2023).
- According to a study conducted by Acquitas and Petralba in 2023 on the impact of
the Rice Tariffication Law on Filipino rice supply concluded that the law has produced
a net benefit to the Philippine rice supply trend. However, the study still emphasizes
the need to further improve the state of the Philippine rice supply to further improve
production.
 - Based on an article published by Kurt Dela Pena under Inquirer, arguments to repeal
the rice tariffication law from farmers are still rampant. The National Movement for
Food Sovereignty (NMFS) and the Alliance for Resilience, Sustainability and
Empowerment (Arise) launched a campaign to amend and then finally repeal the law
citing that since the law has passed, the domestic market has now been flooded with
imported rice. Various sources believe that the change to a tariff system on imported
rice has paved the way for entry for more imported rice, meaning that the law has not
achieved its intended goal of reducing reliance on rice importation.
- As recent as March of 2024, Sen. Risa Hontiveros has filed a resolution to review the
Rice Tariffication Law or RA 11203, noting the issue of rice smuggling and unbanked
farmers and fishermen being the primary reason for this call for review.
Reflection
Salvador
The rice tariffication law, implemented in the Philippines in 2019, aimed to liberalize rice imports,
reduce prices, and make the market more competitive. However, its impact has been mixed.
While consumers have benefited from lower prices, local rice farmers have faced challenges
due to increased competition from cheaper imported rice. There are concerns about the
long-term sustainability of the local rice industry and the welfare of farmers. Reflecting on this,
it's essential to find a balance that supports both consumer affordability and the livelihoods of
farmers through effective policies and support mechanisms.
Macababbad
The rice tarrification law or Republic Act No. 11203 has not only eased restrictions on rice
imports, but it has also increased the government revenue arising from tariffs. Within the first
three years of its implementation, we are able to see its pros and cons such as the pro of having
price stability due to the influx of cheaper imported rice and increasing competition for the
domestic rice produces. Conversely, due to the increased competition, domestic rice farmers,
particularly small-scale ones have been adversely affected by the cheaper imported rice
resulting in many farmers struggling to compete with lower-priced imports, leading to decreased
incomes to their workers. Another problem is the possibility of the Philippines becoming
over-reliant on imports which would make the country vulnerable to fluctuations in global rice
markets and potential disruptions in the supply chain. Overall, the Rice Tariffication Law
represents a significant shift in Philippine agricultural policy. While it has brought some benefits
in terms of price stability and revenue generation, its impact on domestic rice farmers and
long-term food security remains a subject of debate and concern. The law must be continued to
be monitored so that we can address the law's effects to ensure that our local farmers will not
be replaced.
Valdez
The implementation of the Republic Act 11203 or the Rice Tariffication Law has been an issue of
discourse among policymakers, farmers, and consumers. While the law has its merits, such as
the creation of the Rice Comprehensive Enhancement Fund which is solely dedicated to
improving the state of rice farms around the country. The enacting of the law evidently also has
its flaws. Since its implementation, the country still remains the leading rice importer in the world
and the domestic market is still flooded with imported rice leading to high prices of rice and
outcry from local farmers competing with the high amounts of imported rice. With recorded data
and recent studies that have been conducted, the Rice Tariffication Law has undeniably helped
improve the country’s agricultural sector in some way as it was initially supposed to do.
However, the call for further changes from farmers and other policymakers should not go
unheard. The country is still in need of various changes to improve the global competitiveness
of farmers in the global rice market economy to lower the record heights of rice imports and
deter the continued rise of prices across the country. Rice farmers, or farmers in general are still
in dire need of assistance and focus from the government to continue to improve the state of
agriculture in the Philippines.