Agri group: Import cap on rice failed to protect Philippines’ farmers

24.10.2016

Farmer groups and agribusiness operators are in favor of letting the import restriction on rice lapse by mid-2017, saying this has been useless in curbing the influx of grains from abroad anyway.

The Samahang Industriya ng Agrikultura (Sinag) said protection of the domestic rice industry remained only on paper as the Philippines has been importing more than the minimum volume the country had committed to under a World Trade Organization (WTO) mechanism.

Under the quantitative restriction (QR) mechanism of the WTO, a country is allowed to limit the volume of required imports instead of a total ban on importation.

Waiver

Based on the current QR, the Philippines could limit importation to 805,200 tons yearly through private traders. However, this does not include government-to-government importation done through the National Food Authority (NFA).

For the Philippines, this option will lapse on June 30, 2017. The country was able to extend a waiver on the QR’s conclusion several times before, and government officials are at odds on whether to initiate negotiations for yet another waiver.

Two more years

Majority of the country’s economic managers want to allow free trade and thus let the QR lapse while the Department of Agriculture wants to try for an extension of at least two years more.

“Promoting rice self-sufficiency and a significant increase in public spending is the only option viable of the local rice industry given the relatively thin global rice market and the onset of extreme weather situations as the new norm,” Sinag chair Rosendo So said.

With the QR lifted, So said the government should impose the “maximum possible tariff” rate on imported rice.
 
South Korea experience

He said that at the current international price of rice, the tariff should be at least 50 percent.

“In 2014, South Korea decided to lift its QR on rice and instead established a 513-percent tariff on all rice imports and further tightened its control over rice imports through its public trading enterprise similar to NFA,” he said.

He added special safeguard (SSG) mechanisms also needed to be implemented against import dumping, import surges and global price discrimination.

“The government should impose stringent measures in the accreditation, monitoring and issuance of import permits of rice importers; and strengthen the regulatory function of the National Food Authority (NFA) as the sole importer of rice,” he said.


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