Think tank backs removal of rice import restrictions

Lower prices, hunger reduction

MANILA, Philippines - Filipinos are seen benefitting from the planned lifting of the restrictions on the importation of rice through lower prices, reduction in hunger and lower inflation, Foundation for Economic Freedom (FEF) said.

The think tank, which is focused on market-oriented reforms, well-defined and secure property rights, consumer welfare, and good governance, hailed the decision of the National Economic and Development Authority  not to seek an extension of the quantitative restriction (QR) on rice when it expires next year. 

“Lower rice prices and higher disposable incomes for the poor, in turn, will boost the country’s competitiveness, improve quality of life and lead to a reduction in malnutrition,” FEF said. 

It cited reports that showed the previous administration’s policy  limiting rice imports to encourage rice self-sufficiency had resulted in higher poverty incidence and increased malnutrition.   

The QR has allowed the government to limit the volume of rice that could be?imported by the Philippines every year. It protects local farmers by preventing the influx of cheap rice?imports. 

In 2014, the Philippines under former President Benigno Aquino obtained a favorable response from the World Trade Organization (WTO) on its bid to extend the use of QR to 2017. 

The Philippines has appealed three times for an extension of the QR on rice. 

The group also urged the Duterte administration to institutionalize the liberalization of rice imports by seeking legislation to abolish the virtual legal rice monopoly of the National Food Authority (NFA). 

“Instead of being a monopoly rice trader, the NFA should be limited into an agency maintaining rice buffer stocks against an unpredicted rice shortage,” FEF added. 

It also pushed for the imposition of lower import duties on rice. 

“We also recommend the imposition of reasonable tariffs on rice imports under a regime of free rice trade.  The tariff revenue raised should then be used to help rice farmers to increase their productivity or diversify into higher value-added crops,” FEF said. 

The extended QR slaps a 35-percent duty on imported rice under a minimum access volume (MAV) of 805,200 metric tons. The government imposes a higher tariff of 50 percent on imported rice outside of the MAV limit. 

Of the total volume, some 755,000 MT would be country-specific- quota with Vietnam and Thailand getting the bulk. The remaining 50,000 MT is omnibus volume that could be sourced anywhere. 

Socioeconomic Planning Secretary Ernesto Pernia and Agriculture Secretary Emmanuel Piñol are at logger heads over the removal of the QR on rice imports in compliance with the lifting of trade barriers under the WTO. 

“There are some moves in some sectors to extend again the QR on rice but we oppose. The economic ministers are opposing this extension. We are not going to be prevailed over by other members of the Cabinet,” Pernia earlier said in a forum. 

Piñol, on the other hand, has made public his position to seek another extension of the so-called QR by least two more years. 

He warned that the removal of the import curb would be disastrous to local rice farmers, whom he believes are still not ready to compete with cheap imports. – With Richmond Mercurio