NEDA Plans To Remove Quantitative Restriction On Rice Imports - Bizwatch

The National Economic and Development Authority’s plans to remove the Quantitative Restriction or QR on rice imports has been met with severe opposition from some quarters in the agri section. They are disputing NEDA’s claims that it will not result in lower prices of rice. NEDA Chief Ernesto Pernia has said that increased competition would lead to better performance of the Philippine rice industry, and this can be achieved if we scrap the QR on rice importation. The NEDA Chief added that rice imports can be offered at lower prices compared to locally-produced rice. This is because cost of rice production in the Philippines can be as much as one hundred per cent higher than those of Thailand and Vietnam. Here at home, cost of palay production is between P10- 12/kilo as against our neighbors’ cost of between P6-10/kilo. Rice farmers in Thailand and Vietnam also continue to receive subsidies from their government. In the Philippines, rice farmers enjoy less than 3% subsidy from the government, even though under WTO rules, governments are allowed to give subsidies of as much as 10% of the value of production. It may be difficult to understand for many, but the fact is, imported rice is cheaper than locally-produced rice. A leading Asia Pacific economist, Mr. Rajiv Biswas was quoted as saying that the June 2017 expiration of the waiver granted to the Philippines in 2014 extended the QR. Moving to a tariff-based system under the terms of the Philippines’ agreement with the World Trade Organization may encourage improved efficiency and higher quality of Philippine rice production. Meanwhile, there is an agri lobby group that is strongly opposed to the government’s plan to scrap the quantitative restriction on rice imports. This is the Samahang Industriya ng Agrikultura or Sinag. Sinag chairperson Rosendo So claims that removal of the QR will scrap the farmers’ protection from cheap imported rice and will not result in lower prices of rice. The QR will end in June 2017. This has been extended three times in the past, and extending it for the fourth time will not be good for the country’s image, according to NEDA. According to several agri groups, several farmers may lose their jobs when the QR is finally lifted next year. The local rice farmers will also be forced to compete with imported rice producers. However, NEDA Chief Ernesto Pernia said that the only safety net that government can provide for farmers who may be affected will be the CCT-type of aid as there is no budget for government support for displaced rice farmers. Under the Quantitative Restriction, there is a limit for Manila of 805,000 metric tons of rice entering the country through the MAV minimum access volume. The MAV refers to the minimum volume of agricultural produce allowed into the Philippines at reduced tariffs while others outside of MAV may have as much as 50% higher tariffs. This is aside from the requisite NFA approval. Sinag chair So also said that climate change has resulted in much less rice production for many countries. He added that at least 20% of the available rice in the global market are allotted annually to China and Nigeria, adding to the shortage and instability of rice.