Rice Tariffication Law

(RA 11203)
Engr. Teodulo Dalusong Jr.
Outline

1. Terminologies
• Tarrifs
• Quantitative Restriction (QR) on Rice
• Minimum Access Volume (MAV)
2. Why we need the RTL (RA 11203)
3. How the RTL can affect the Consumers and Farmers
4. Highlight of RA 11203
Terminologies

Tariffs
Are taxes imposed by the governments on import goods. Tariffs
are revenues for government. But they are also a way of
restricting trade and protecting the domestic producers because
they make imported goods more expensive.
Terminologies

Quantitative Restriction (QR) on Rice

QR are limits to the amount of goods that may be imported into
the country. Similar to tariffs which affect price, quantitative
restrictions also limit trade and protect local producers by limiting
the availability of imported goods.
Terminologies

Minimum Access Volume (MAV)

MAV refers to the total volume or quantity of a specific agricultural
commodity that may be imported with a lower tariff. This is a
commitment of the Philippines to the WTO to facilitate trade
between countries.
Why Should RA 8178 Be Amended?

• The 24 year old law RA 8178 exempts rice from tariffication.

• Amending this law to allow the replacement of the quantitative
restrictions (QR) on rice imports with tariffs is deemed beneficial to
consumers, even for rice farmers whom are net consumers of rice.
Why Do We Need The
Rice Tariffication Law (RA 11203)?
• There is a need to liberalize because it is the provision of our agreement
with the WTO.
• The Philippines is a signatory to the WTO and has lifted quantitative
restrictions on imports of food products.
• Import restrictions were lifted on rice importation
• Creation of the Rice Competitiveness Enhancement Fund (Rice
Fund).
• Rice Tariffication law will impose a tariff on rice importers to be used for
the rice competitiveness enhancement fund.
• Importers of rice will be required to pay 35% levy or tariff on rice
imports from ASEAN countries, and a 40% tariff on all imports
from non-ASEAN countries.
How the RTL can affect the
consumers and farmers:
1. Affordable rice will be available for everyone.
• Lower rice prices that would help reduce inflation.
• Since the approval of RTL, retail prices of rice have dropped
compared to September 2018, making it more affordable for everyone.

2. More disposable income for workers.

• Increase savings through lower rice expenditures.
• Money saved can be put into their savings, education of their children,
emergency funds, or other investments.
How the RTL can affect the
consumers and farmers:
3. Improve nutrition and well-being of many people.
• Filipinos gain access to affordable and high-quality rice, the country
will have about 2.1 million less hungry people and malnourished
children by 2025.

4. Taxes can be used to other sectors.

• Filipinos’ tax payments will no longer heavily subsidize the National
Food Authority (NFA) under the RTL.
• Taxpayers’ money can now be allocated to other programs that
improve education, healthcare, public works, and more.
How the RTL can affect the
consumers and farmers:
5. Help farmers become globally competitive.
• Collected tariff revenue will be used to support farmers
• The RTL also protects farmers and modernizes their livelihood.
• The Rice Tarification Law addresses major problems from the current
agricultural system to make the country’s rice sector more efficient,
progressive, and competitive.
 1995 2005 2012 2017 2019
• The Philippines • The 10 year grace • Second • The waiver • PRDP signed
became a period expired extension expired on June the RA 11203
member of the • The Philippines expired. 30, 2017 on February
WTO. applied for • Requested for • WTO increased 14, 2019
• Philippines was another 7 year another 5 pressure to the
given permission exemption. year country to fulfil
to maintain QR • The request was extension its obligation to
on rice (annex 5 approved by the • The request shift to
of the WTO WTO in exchange was again tariffication.
Agreement of to reduce tariff on approved by
agriculture or other import the WTO in
special produce and exchange to
treatment increase the MAV. reduce tariff
clause) on other
import
produce and
increase the
MAV.
Highlights of RA 11203
QR on Rice will be replaced by Tariffs
• 35% from ASEAN countries
• 40 % non-ASEAN countries if imports are bellow the MAV and 180%
above the MAV

Tariff revenue will go to the RCEF of Rice Fund

• 50 % for Mechanization
• 30% for Inbred Seed Propagation and Development
• 10% for Extension Services
• 10% for Credit Assistance
Highlights of RA 11203
Excess tariff revenue will be appropriated by congress for;
• Rice Farmers Financial Assistance
• Titling of Agricultural Rice Lands
• Expanded Crop Insurance
• Crop Diversification
Rice Tariffication Law
Section 13. Rice Competitiveness Enhancement Fund – Creation of RCEF
with an annual appropriation of Ten billion pesos (P10,000,000.00) for the
next six years.

(13.a) Fifty percent (50%) of the Rice Fund shall be released and
implemented by PHilMech as grant in kind to eligible farmers association,
registered rice cooperatives and LGUs.
• Grant in the form of rice farm equipment, such as tillers, tractors,
seeders, threshers, rice planters, harvesters, irrigation pumps, small
solar irrigation, reapers, driers, millers, and the like, for the purposes
of improving farm mechanization.
Why do we need to invest in developing
mechanization and postharvest facilities?
1. Low productivity of rice farming

2. Filipino farmers have to be competitive in terms of

price, volume and quality of their produce.
LOW PRODUCTIVITY–HIGH PRODUCTION COST
Comparative Cost of producing 1 kg of rice in selected ASEAN countries,
2013-2014, in Peso per kg. by PhilRice

Activity Thailand Vietnam Philippines Indonesia

Land Rent 1.89 1.49 2.11 6.61

Current Inputs 3.93 2.98 3.84 2.97
Machine and animal 1.67 0.78 1.77 0.51
Labor 1.30 1.02 4.53 5.32
Interest on Capital 0.07 0.08 0.43 0.32
LOW PRODUCTIVITY–HIGH LABOR USE
Total labor use in selected ASEAN countries, 2013-2014 in man-day per
hectare by PhilRice

Activity Thailand Vietnam Philippines Indonesia

Land Preparation 1.8 2.4 8.8 14.7

Crop establishment 0.9 6.3 20.7 21.7
Crop Care and 6.3 11.0 18.8 27.3
Maintenance
Harvesting and 0.7 1.2 18.3 25.6
Threshing
Postharvest 0.0 1.1 2.0 6.9
Total Labor 9.7 21.9 68.7 96.2
LOW PRODUCTIVITY–HIGH PRODUCTION LOSSES
PH Operation % Loss (Average) % Share
Harvesting 2.03% 12
Piling 0.08% 0.5
Threshing 2.18% 13
Drying 5.86% 36
Milling 5.52% 34
Storage 0.8% 5
TOTAL 16.47% 100
LOW PRODUCTIVITY –
LOW LEVEL OF MECHANIZATION
• Philippines - 2.31hp/ha
• This is one of the reasons behind low productivity and high postharvest
losses.
• Land Preparation – Intermediate to High
• Planting/Transplanting – Low
• Crop Care/Cultivation – Low
• Harvesting – Low
• Threshing – Intermediate to high
• Drying – Low
• Milling – High

(Regional Forum 2013)

LOW PRODUCTIVITY–LOW LEVEL OF ADOPTION
OF MECHANIZATION
Adopters of machine in selected ASEAN countries, 2013-14

Activity Thailand Vietnam Philippines Indonesia

Combine Harvester 100 100 3 0

Axial Thresher 0 0 97 63
Four wheel tractor 55 76 - -
Two-wheel tractor 44 24 98 96
Power Sprayer 1 0 1 0
Mechanical 0* 0* 0 0
Transplanter
THANK
YOU FOR
LISTENING!
 RICE COMPETITIVENESS
ENHANCEMENT FUND (RCEF)
MECHANIZATION PROGRAM
Engr. Teodulo Dalusong Jr.
 Educational Background:
Bachelor of Science in Agricultural
and Biosystems Engineering
Mindanao State University (Main
Campus)

Engr. Khalid Y. Sanggacala Work Experience:

Lanao del Sur Provincial Focal, FMFOD Technology Management and

Training Division
Philippine Center for Postharvest
Development and Mechanization
Training Course on Research Science Analyst
Postharvest Technologies 2021-present
Drying and Milling
Outline

Program Concepts and Overview

• Program Funds
• Coverage area and Funding
• Program Goals and Objectives
• Conceptual Paradigm
• Technologies that can be availed
Implementing Guidelines
• Implementation Process
• Criteria for the selection of recipients
• Technical Requirements for the FCAs to qualify as beneficiary
• Minimum Documents to be submitted
Program Funds

Funding shall be sourced from the Rice Competitiveness Enhancement

Fund as stated in the RA 11203.
• 5 Billion pesos per year for the next six (6) years.
• 100 Million pesos per year for the extension component for the
next 6 years.
Coverage Area and Duration

Region 16
Provinces / 57 rice producing
Municipalities provinces (consists of
around 1,000
municipalities) as
provided under the
Philippine Rice
Industry Roadmap
The program will be implemented in 6 years and a
mandatory review shall be conducted by the
COCAFM.
Program Goal

To raise rice farmers’ productivity, profitability and

global competiveness thru strengthened access and
use of appropriate production and postproduction
mechanization technologies.
Objectives
Objective 1.
To make accessible to rice farmers the appropriate rice production
and postharvest machineries and equipment through to the farmer
cooperatives, associations (FCAs).

Objective 2.
To promote among Filipino rice farmers the use of efficient and cost
reducing rice mechanization interventions.

Objective 3.
To strengthen local agricultural machinery manufacturing industry
through aggressive technology development, fabrication and
manufacturing.
Expected Benefits

1. Reduction of production cost of farmer-users by

Php 2-3 per kilogram using precise and effective
mechanized production technologies, and
2. Reduction of postproduction losses of farmer-users
by 3-5% using appropriate and efficient postproduction
technologies.
Technologies that can be availed from the
RCEF Mechanization Program
Intervention 1: Land Preparation

• Effectively break & loosen soil

clods for optimum root & plant
growth
• Eliminate weeds for maximum soil
nutrient uptake by plants 4-Wheel Tractor & Rotavator
• Well-levelled land for good
irrigation and uniform maturity

Good field levelling increases the

rice yield considerably
Hand Tractor & Floating Tiller
Intervention 2: Plant Establishment

• Precise depth & placement of

seedlings for stability & vigor
• Use young seedlings for faster
transplant recovery & growth
• Direct seeders eliminate the cost Riding Type Transplanter
in seedling preparation & optimize
seeds requirement per area

Good crop growth & higher

density planting –up to 10%
Precision Rice Seeder
increase in yield
Intervention 3: Harvesting

• Combine the crop cutting &

threshing in one operation for
efficient and improved operation
• Require minimum manpower &
Rice Reaper and Thresher
save on high labor costs
• Timely harvesting with an
estimated 2 hours per hectare
capacity

Save 3-5% harvesting cost and up

Combine Harvester
to 3-5% in postharvest losses
Intervention 4: Grain Drying

• Mechanical dryers enable farmers to

immediately dry grains even on
inclement weather or rainy days
• Controlled drying air temperature
prevents over-drying, grains weight
losses & broken rice kernels
• Easy to operate and do not require
much labor as compared to sundrying
Mechanical Dryers
Save up to 5% postharvest losses Recirculating Dryers
from spillages, over drying and Batch Type Dryers
Mobile Dryers
broken kernels
Intervention 5: Rice Milling

• High efficiency milling with optimum

milling recovery of 65%
• Village or Local Milling will encourage
to stabilize the supply of milled rice in
the locality Compact Village Rice Mill

• To encourage value adding of rice

through rice milling trade

Save up to 3% milling losses due to

low milling recoveries by inefficient
Single Pass and Multi-pass Rice
milling machines Mill
Implementing Guidelines
Implementation Process A

START Selection and Approval of Recipients

Submission of Letter of Intent

With attachment Execute MOA with Recipients

Evaluation of Submitted
Documents No, ask the
applicants to comply
Briefing/Orientation /Education of
required documents
Recipients
Are the submitted documents
complete, valid and
authentic?
Conduct of Capability Building

Yes
Field Validation
Delivery and Installation

Is the site compliant with the set No

criteria of the guidelines? Needs to comply
Trial Run, Testing and Evaluation

Yes
A B
Implementation Process
B

Inspection, Acceptance and

Documentation

Turnover of Machineries and

Facility

Periodic Monitoring

Are the Facilities Operational and No Provide Technical Assistance

Properly Maintained? (Coaching and Mentoring)

Yes

END
Criteria for the Selection of Recipients
Recipients should be a rice-based farmers associations, registered rice
cooperatives and LGUs.
• The beneficiaries of the Rice Fund shall be those rice cooperatives
and associations accredited by the DA.
• The program shall give priority to eligible rice farmers associations
and registered rice cooperatives.
Technical Requirements for the FCAs to
Qualify as a Beneficiary
• Should have at least 50 ha rice farm of regular members.
• Must have a minimum rice area of 100 ha within the peripheral barangays from
the proposed location of the agricultural machineries and postharvest facilities.
• Must have the capacity to operate and maintain the machinery and equipment
and willing to undergo training course/s.
• Must be willing to provide machinery shed as counterpart for the project.
• Should be willing to operate the project according to the prescribed model.
• Follow the recommended suggested service fee (SSF)
• Operate and manage the project using an integrated and systems approach
of farm machinery and equipment operation and management.
• Should be willing to undergo capability building activities
• Should conform to the set objectives and functions of the project.
Minimum Requirements
for the FCAs to Submit
1. Letter of intent and resolution from the farmer organization stating the
need for the farm machineries and postharvest facilities, willingness to
provide shed for the project.
2. Certificate of accreditation from the DA.
3. Farmer Association/Cooperative Profiles
a. List of farmer members with corresponding rice farm area
b. Machineries present and other information related to the coop’s/org
operation.
Technical Requirements for the LGUs to
Qualify as a Recipient
• The municipality/city where the project will be located should have a minimum
rice area of 300 ha including its peripheral barangays.
• Must have the capacity to operate and maintain the machinery and equipment
and willing to undergo training course/s.
• Must be willing to provide machinery shed as counterpart for the project.
• Should be willing to operate the center according to the prescribed model.
• Follow the recommended suggested service fee (SSF)
• Operate and manage the project using an integrated and systems approach
of farm machinery and equipment operation and management. .
• Should be willing to undergo capability building activities
• Should conform to the set objectives and functions of the project.
Minimum Requirements
for the LGUs to Submit
1. Letter of intent and resolution from the LGU Council.
2. Provincial Municipal, City or Barangay Council Resolution for LGU
owned shed for the project.
3. Rice Production Profiles
a. List of rice farmers with corresponding rice farm area within the
barangay where the project will be located.
b. List of machineries present in the municipality/barangay where it will
be located.
Target Setting and Prioritization
The program will consider the “needs based system”.
• This is to ensure that the preferred and appropriate technologies will
be provided to FCAs, and machinery gaps and requirements will be
addressed.
• This will be done through a technical needs assessment and field
validation of the specific technology requirements of the FCAs.
Trial Run, Testing Evaluation and Inspection
Trial Run
• After the delivery and/or installation, a trial run should be done to all
the farm machineries and postharvest facilities/equipment to be
distributed or already delivered.
Testing and Evaluation
• Confirmatory performance testing and evaluation shall be done to
purposively and randomly selected machineries and facilities by
PHilMech in partnership with collaborating agencies.
Technical inspection
• Shall be done for all the machineries, facilities and equipment
delivered to recipients by authorized PHilMech inspector.
Information Dissemination and
Capability Building
• Information, Education Communication materials and information
campaign/dissemination
• Training on Operation and Maintenance
• Learning Sessions/Coaching and Mentoring on Management
• Training for technician, mechanics, fabricators and manufacturing workers
• Specialized training for operators, workers, field staff implementers,
field/test engineers and selected farmers.
• Monitoring, Benchmarking, Assessment and Evaluation
Operation and Management of the Project
A. Operation of the agricultural machineries and postharvest facilities
1. Systems and approaches of operation and management. The FCAs
is envisioned to progressively adapt and grow to provide:
• Provide technical services for the good practices and technologies on rice
production and processing among rice farmers and agricultural technologists,
• Provide education, technical capability building, training in maintenance and
proper use of agricultural machineries and equipment for farmers,
• Provide custom services for farm mechanization technologies, and
• Conduct repair and troubleshooting services of agricultural and fishery
machinery and equipment.
Operation and Management of the Project
B. Management of the agricultural machineries and postharvest
facilities
1. There should be a trained manager to ensure the day-to-day
operation of the center. Training for the managers shall be provided
by PHilMech, RFOs and LGUs.
C. Operational Plan and Policies
1. An operational plan and policies should be prepared by the
beneficiaries with the assistance of PHilMech/RFOs/LGUs.
Operation and Management of the Project
D. Financial Analysis and Operational Manual
1. An operational manual shall be prepared by the FCA with
assistance of PHilMech, RFOs and LGUs, as reference in the day-to-
day operation and management of the project.
2. A financial analysis of the agricultural machineries and postharvest
facilities shall be prepared by the FCA with the assistance of
PHilMech, RFOs and LGUs.
THANK
YOU FOR
LISTENING!