AFTER two years of negotiations with the World Trade Organization (WTO), Manila has finally acquired a five-year extension of its quantitative restriction (QR) on imported rice, which should protect local farmers from an influx of cheap imports of the grain, the Department of Agriculture (DA) said on Monday.
“By July this year, we will [be]implementing a new round of QR,” Agriculture Secretary Proceso Alcala told a media briefing.
Alcala said they expect the Committee on Trade in Goods to endorse to the WTO General Council the Philippine request to extend until 2017 its QR.
“This is just for formality,” he added.
Manila has been consistently lobbying with its neighbors in the Association of Southeast Asian Nations (ASEAN) and with its major trading partners for an extension of the trade restriction. At present, only South Korea and the Philippines make use of the QR.
The QR sets a 40 percent tariff on imported rice under the Minimum Access Volume (MAV) while imports outside the MAV are slapped a tariff of 50 percent.
As in previous bids to extend the QR, Manila offered other rice-producing countries certain trade concessions, such as greater access to the Philippine market of other products.
“This time around, there were no major requests from interested countries for market access. However, there will be a slight increase in the minimum access volume, and tariff rate for rice among Asean member countries will be brought down to just 35 percent, while non-Asean countries will remain at 40 percent,” Alcala said.
The DA chief, however, did not specify the new volume for MAV, noting that the Philippine panel at the WTO has yet to disclose the figures.
Under the previous agreement with the WTO, Manila has committed to a MAV of about 350,000 metric tons (MT) of rice, with tariff rate of 40 percent.
MAV refers to the minimum volume of farm produce allowed to enter into the Philippines at reduced tariffs, while shipments outside MAV pay higher rates of 50 percent and would need approval by the National Food Authority.
Under the MAV, Manila has a country-specific quota for Thailand (98,000 MT), China
(25,000 MT), India (25,000 MT), and Australia (15,000 MT). The remaining 187,000 MT were classified as the omnibus minimum access volume, which can be accessed from any country.
Meanwhile, Alcala said until 2017, the Department of Agriculture has lined up programs to boost palay production and prepare local farmers to be globally competitive.
Most notable of these programs is the “Palayabangan: 10-5 Challenge” that enforced the 10-5 standard wherein farmers must produce 10 tons of rice per hectare while spending only P5 worth of input for every kilogram of rice produced.
“The Palayabangan is a concrete example of how DA prepares local farmers for Asean integration in 2015,” he said.
Alcala cited initial estimates by PhilRice, which showed that paddy rice production in the Philippines costs higher compared to Thailand and Vietnam.
“If our farmers achieve 10-5, they will still gain even if rice is priced at P10 a kilo. It is important to control the cost of input because the cost of rice production in the Philippines came out to be P11 per kilo while other Southeast Asian countries spend P8 or lower,” he added.
Under the 10-5 standard, Alcala said that farmers would be able to compete globally and in the long-term help minimize smuggling and importation.