Rethinking Rice Policy: Philippine Rice Tariffication as a Win-Win-Win Policy for the Poor, Consumers and Farmers

Abstract

No other food is more central to Filipinos’ diets than rice, yet no food poses a greater burden on poor and near-poor Filipinos’ budgets. According to the 2015 Family Income and Expenditure Survey, the poorest 20% of households’ rice expenditures alone accounted for more than 19% of their total budgets, whereas it was only 5% of expenditures for the richest 20% of Filipino households. The Duterte administration has a window of opportunity to address this situation by shifting away from a rice importation regime based on quantitative restrictions (i.e. import quotas) to one based on moderate rice tariffs.

In this policy brief, we summarize evidence which on balance indicates that approving this rice tariffication reform is likely to be a win-win-win measure for Filipinos and the Philippine economy at large. Specifically, adopting moderate tariffs on rice imports, we find, would benefit poor and near-poor consumers, workers, industry, and even rice farmers themselves, should revenues from the tariffs be earmarked for spending on safety nets and social protection measures, as well as a productivity enhancement fund dedicated to rice farmers, to be managed on a participatory basis.

Keywords: Rice Policy, Rice Tariffication, Philippines

JEL Classification: N55, O13, Q17