Government needs to ease rice imports, support farmers

CEBU, Philippines - It's high time for the Philippines to finally lift the restrictions on rice imports to be able to compete and bring down costs of the staple.

In an interview yesterday, Leodegario Alabarca Jr, senior trade and industry development specialist at Bureau of International Trade Relations, said it's time for the country to open its economy to more rice imports.

Although he also added that the government has to help those farmers who are bound to be affected by cheap rice imports.

The government has to do bold measures to help the affected farmers, he said.

Quantitative restrictions (QR) on grain importation will expire middle next year and is planned to be not renewed by the Duterte administration which wanted market forces to dictate rice prices.

The restrictions were aimed to protect local farmers from foreign rice imports by imposing a high 35 percent tariff rate after reaching a particular shipment ceiling.

The Department of Agriculture had insisted that removing the QR will be a disadvantage to local rice farmers, whom are still not ready to compete with cheap imports.

But the National Economic and Development Authority,for its part, said the government would import more rice to comply with a World Trade Organization agreement to lift barriers on the staple food.

NEDA said the expiry of the quantitative restrictions on rice by mid-2017 is an important opportunity to reduce the cost of rice, which eats up 20 percent of the budget of the poor. 

In 2014, the Philippines under former president Benigno Aquino III gained approval from the WTO to keep import restrictions for three more years to June 2017.

Economic Planning Chief Ernesto Pernia had emphasized that the removal of QR would result to lower rice prices, benefiting both consumers and farmers.

“The competition is always good for people to get their acts together and deliver results. That should be our position,” he was quoted in a previous report of Philstar.

Cost of producing palay (unmilled rice) in neighboring countries such as Thailand, Vietnam, and Cambodia is around P6 to P10 per kilo compared to the significantly higher P10-12 per kilo in the Philippines.

Republic Act 8178 or the Agricultural Tariffication Act of 1996 lacks an expiry on the use of the QR on rice, a subject for concern should other WTO members file charges against the country on the continued use of the non-tariff measure, binding the government to act on its provisions. (FREEMAN)