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Monday, March 31, 2008

Govt lays down options besides rice tariff cut

BY Chino S. Leyco Reporter

THE GOVERNMENT is still looking for other options aside from cutting
 the rice tariff amid skyrocketing commodity prices in the global market, the Department of Finance said.

Finance Secretary Margarito Teves said the country’s econo­mic managers are considering many options to combat the instability in rice prices, like relaxing the tariff and state subsidy, adding the reduction on tariff will affect the govern­ment’s revenues.

Teves said if the government decides to maintain the 50-percent rice tariff, the state may subsidize the rice purchase of the “very poor and other affected sectors.”

He added the possible rice sub­sidy will come in the form of cash coupons, which will be distributed directly to poor families.

“Under this targeted ap­proach, we’ll channel the funds to the vulnerable sectors,” he said, adding the Department of Social Welfare and Development will distribute the cash coupons.

To keep rice prices stable, the Finance chief said the govern­ment may still slash rice tariff by 10 percent to 40 percent.

“Right now, without it, at present prices, rice importa­tion is not attractive to the private sector,” Teves said.

Currently, the state-run National Food Authority sells rice at a loss of P18.25 per kilo, significantly lower than com­mercial rice, which is sold at P30 per kilo at the least.

NFA, meanwhile, said the government may increase further the allotted volume of rice imports for the private sector this year, amid plans of tariff cut and a looming crisis of the grains.

NFA Administrator Jessup Navarro said the Finance and Agriculture departments are drawing up mechanisms to relax the rice tariff from 50 percent, which will encourage the private sector to avail of its yearly allocated rice import volume.

Navarro said last year the government had set aside 400,000 metric tons for commercial rice import but only 7,000 MT was procured, citing “they didn’t want to avail of it because of high tariff.”

This year, the government allotted 300,000 MT for commercial use, Navarro added.

The economic managers will meet again to discuss the feasibility of reducing the rice tariffs for its fiscal ramifica­tions and its impact on the agricultural sector.

“We have to calibrate how it works in terms of its revenue im­pact. Also, we have to see what could be the impact on other players in the agricul­tural sector because they might also ask for tariff reduction,” Teves said.

Agriculture gets P12 billion from LandBank

The Agriculture department has secured P12-billion fund­ing from the LandBank of the Philippines to support its ongoing initiatives to stabilize rice prices and boost the production of staple and other food crops.

 In a report to Yap, National Agriculture and Fisheries Council Director Bernie Fondevilla said that of the P12 billion, P5 billion will benefit farmers in the country’s rice-growing areas.

 The rest will go to livestock production, with P2.54 billion; high-value commer­cial crops, P2 billion; industrial crops like rubber and oil palms, P1.5 billion; fisheries, P700 million; and corn, P300 million.

 Fondevilla said LandBank President and CEO Gilda Pico had assured the Agriculture department that the bank is “ready to extend more fi­nan­­cial support if there is a big demand for credit assistance from qualified farmers’ orga­ni­zations.”

 Last year, the bank released P2.92 billion to help boost rice harvests and P210 million for corn production, which benefited more than 47,000 farmers nationwide.