THE Federation of Free Farmers (FFF) said that while the Rice Tariffication Law (RTL) had some positive impact on the country’s rice sector, what the government reports on the law’s benefits are “half-truths” backed by “deceptive” claims.

In a position paper, Leonardo Montemayor, board chairman of the Federation of Free Farmers (FFF), presented their stand over the economic effects of the RTL, or Republic Act (RA) 11203, as President-elect Ferdinand “Bongbong” Marcos Jr. is yet to make a pronouncement on the law.

The Rice Tariffication Law removed restraints on the importation, exportation and trading of rice. Restraints on imports were replaced by tariffs. Also, RA 11203 removed the National Food Authority’s (NFA) control over rice importation and allowed unimpeded imports by the private sector.

RA 11203 also created the Rice Competitiveness Enhancement Fund that the country’s economic managers claimed lowered rice prices, curbed inflation, provided additional support to farmers and reduced government losses.

However, what the government reports to the public is not the whole truth, Montemayor said. “As they claim, rice prices really dropped by as much as P7 per kilo from their peak in 2018. But this was not solely due to RTL. Even before the law took effect in March 2019, prices had already gone down by P3.50 per kilo with the arrival of emergency imports that were approved by the government in late 2018,” he said.

Montemayor accused the country’s economic managers for being “intellectually dishonest” by limiting their comparison to prices in 2018, when prices were abnormally high due to the rice crisis.

“They must be aware that prices during the first three years of RTL practically matched, on the average, prices during the more normal years of 2016 and 2017. But they do not divulge this fact, because it will mean that consumers did not fare better under RTL and that the promised cheaper rice — resulting from unbridled imports — did not truly materialize,” he explained.

For his part, Agriculture Secretary William Dar said the artificial rice shortage in 2018 was due to the NFA’s mistimed imports, which resulted in rice inflation. However, he defended that “the RTL now corrects such instances by removing NFA’s monopoly on rice importation . . . [The] RTL was created in the spirit of avoiding another shortage and improving the competitiveness of our local rice farmers.”

But economic managers are to be blamed for the rice crisis in 2018, FFF said, accusing that it was their cabal within the NFA council that repeatedly rejected requests from NFA management to replenish agency stocks with imports, until the agency ran out of rice and prices got out of hand. “Then they used the crisis to justify the speedy passage of RTL. And when rice prices went down, they heralded the success of the law in solving a problem that they, themselves, actually created,” Montemayor said.

At the same time, Montemayor emphasized that the government’s assertion that the Rice Tariffication Law reduced rice-based inflation is also “highly misleading.”

“Zero inflation in rice merely means that prices have not changed relative to a previous period. Even with zero inflation, consumers are not better off, because they are still paying the same high prices for rice as in 2016 and 2017,” he pointed out, noting that the poor are worse off under a liberalized rice trading regime as it stopped NFA from selling P27 per kilo regular rice in public markets.

“Importers, in turn, elected to bring in the more expensive premium grades of rice, which gave them a higher profit margin. Poor consumers now have no choice but to pay P10 more per kilo to get regular rice from commercial traders,” added Montemayor.

For Dar, however, the RTL being signed into law came at a “good” time or in February 2020 because the pandemic hit the country in March of the same year and there were fears of major commodity shortages. “Vietnam, a major source of our rice, imposed a temporary export ban. So the liberalized regime also permitted us to explore other sources such as India. Thankfully, the shortage did not come to pass even at the height of the lockdowns,” he said in a statement to The Manila Times.