From Fields to Futures: The Economic and Occupational Impact of the Rice Tariffication Law

Abstract

Aims: This study examines the economic and occupational effects of the Rice Tariffication Law (RTL) on rice farmers in the Philippines, estimating its impact on income, occupational mobility, and income distribution between beneficiaries and non-beneficiaries using microsimulation and logistic regression. Study Design: A quantitative econometric analysis employing microsimulation modeling and multinomial logistic regression to assess the ex-ante effects of RTL on farmers’ income, expenditures, and occupational decisions. Place and Duration of Study: The analysis uses nationally representative data from the 2018 Family Income and Expenditure Survey (FIES) and simulates income and occupational changes from 2018 to 2021. Methodology: The study applies microsimulation techniques and logistic regression models to estimate RTL’s impact on household income and occupational shifts among wage workers, rice farmers, non-rice farmers, and the unemployed. A Heckman two-step model addresses selection bias. The simulation incorporates Rice Competitiveness Enhancement Fund (RCEF) provisions on mechanization, seed distribution, and credit support. Results: Beneficiary rice farmers experienced an estimated 52% increase in income, while non-recipients saw a 19% decline. Regions II, VI, CARAGA, III, and IV-B recorded the highest gains (16%–60%). Occupational analysis shows that about 3,000 non-rice farmers shifted into rice farming after RTL implementation. Income, education, marital status, and number of children were significant predictors of occupational choice. Conclusion: RTL substantially improved the income of beneficiary rice farmers but negatively affected non-recipients. Strengthening and localizing RCEF implementation, alongside expanding microfinancing programs through LBP and DBP, is recommended to ensure equitable support. Continued policy refinement and broader rural investment are essential for sustaining farmer welfare and promoting inclusive agricultural growth.