Lobby group Sinag wants Duterte admin to lift QR on rice

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LOBBY group Samahang Industriya ng Agrikultura (Sinag) the quantitative restriction (QR) on rice lifted for failing to protect the local industry against competition from cheaper imported grains that supposedly turned farming industries into sacrificial lambs in exchange for a two-year cap on importation.

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The Duterte administration should lift rice QRs and impose the maximum possible tariff line of 50 percent at current international prices of rice, SINAG Chairperson Rosendo So said in a statement.

“On paper, the country’s rice industry is supposed to enjoy protection from wanton imports under the rice QRs. But this remains merely on paper,” So said in a statement.

“Our QRs did not curb rice imports; we have been importing more than the required QRs, excluding smuggled rice, for the past ten years,” he added.

According to Sinag, the Philippines on average imported 1.8 million MT of rice from 2006-2015, significantly higher than the minimum access volume of 350,000 MT (2006-2011) and 805,200 MT (2012-2015).

The nine-year average does not include smuggled rice that entered the country at that time, estimated to have reached as high as 1 million MT in 2012 alone.

“The QRs has given us, at best, a fabricated sense of protection from the government for the past 20 years,” So claimed.

Impact on poultry and livestock
Sinag alleged that the livestock and poultry industries were forced to bear the brunt of wholesale technical smuggling in the guise of reduced tariff from 40 percent to 5 percent on pork offal, pork fats and mechanically de-boned meat for chicken starting in 2006.

“As if on cue, smugglers and their cohorts in the bureaucracy found a novel way to smuggle pork meat by simply declaring their imports as pork offal or pork fats,” So alleged.

“The imposition or non-imposition of QRs is temporary relief. What is needed ultimately is a comprehensive government program that would significantly increase public spending in the rice sector,” he said.

Regulating imports
Sinag believes the time is ripe for the Philippines to lift the QR on rice, and significantly increase public spending in sector to make local farmers competitive on a regional scale.

The government should strengthen and impose tougher measures in regulating rice imports, including smuggling and unscrupulous traders and importers who use farmers’ cooperatives as dummies under the private sector rice importation scheme to corner the bulk of importation, according to the group.

“Though permits are supposedly allocated to farmer cooperatives, the reality is that these permits are being bought (and recycled) by unscrupulous rice traders or financiers; similar to the schemes already exposed in the series of Senate hearings on the modus of Davidson Bangayan and other consolidators of rice import permits,” So noted.

The majority senators and heads of pertinent government agencies have concluded that it was more expedient, beneficial and advantageous for the country to have the National Food Authority as the sole importer of the commodity.

Private traders were allowed to import rice in 2011 to 2012, coinciding with the rise in cases of rice smuggling, a situation that was reversed when private sector importations were regulated in 2013 and 2014.

With the state-owned NFA as the sole importer, it could guarantee its mandate of having a 15-day buffer stock for the country, and 17-day mandate in critical areas can met as the need arises, So noted.

With rice as staple food the most viable option for a country with a growing population is self-sufficiency in rice, according to Sinag.

“Any discussion on the prospect of the rice industry should look into the relatively thin world rice market and, recently the impacts of extreme weather situation; as major considerations,” so said.

Rice production has not been increasing significantly at the global level, and this year the projection is a decline in global rice production.

One of the Philippines’ major sources of imported rice, Vietnam has reduced exports by at least 100,000 tons.

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

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