Farmers reject proposal to extend low-tariff scheme for food imports

REUTERS

THE Federation of Free Farmers (FFF) said the government should not extend Executive Order (EO) No. 171, which temporarily lowered tariffs on food imports, and instead address the domestic production side of boosting the food supply.

“It will be ironic and tragic if our government ends up listening to them instead of its own farmers,” Raul Q. Montemayor, FFF national manager said via chat in response to a request to comment on the extension of EO 171, which was supported recently by various foreign chambers of commerce.

“It is hypocritical and self-serving for (foreign chambers) to ask us to lower our tariffs and open our markets to sensitive commodities while they restrict or use distortive measures to block other countries’ exports,” he added.

EO 171 lowered tariffs temporarily on imports of corn, rice, pork, and coal. The EO, issued as an inflation-control measure, expires on Dec. 31. It was signed in May by former President Rodrigo R. Duterte.

On Dec. 2, the American Chamber of Commerce of the Philippines, Canadian Chamber of Commerce of the Philippines, and the European Chamber of Commerce of the Philippines issued a joint statement urging the government to extend the validity of EO 171 until 2023, saying that an extension would help address surging food prices.

According to the three foreign chambers, the extension of EO 171 is needed to address inflation, which accelerated to 7.7% in October from 6.9% in September.

“Inflation has a major impact not only on the cost of doing business, but more dramatically on the expenses of Filipino households who ultimately bear the cost of rising prices. The impact is sharpest for those living near or below the poverty line. It is estimated that the poorest percentile of Filipino households spend up to 60% of their income on food, which has been a major driver of inflation these past months,” the three chambers said.

Mr. Montemayor noted that the US and European farm industries are highly protected, with those governments “pouring in billions of distortive subsidies to support their farmers and using various non-tariff measures to control imports. Canada employs a supply management scheme that controls imports through quotas.”  

“This (EO 171 extension) issue is a crucial indicator of where policy direction is really leading to and whether (President Ferdinand R. Marcos, Jr.) is really serious in promoting local production over imports,” he added.  

EO 171 imposed a 35% tariff on all rice imports, bringing other supplier countries in line with the rate charged Southeast Asian suppliers. Pork imports within the minimum access volume quota are charged 15% instead of 30%, while pork outside the quota pays 25% instead of 40%.

The order also lowered the tariff corn imports within the quota to 5% from 35% and out-of-quota corn imports to 15% from 50%.

The order also lowered the duty on coal imports to zero from 7%. — Revin Mikhael D. Ochave

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