- Category: Agri-Commodities
25 Feb 2013
- Written by Marvyn N. Benaning / Contributor
THE Philippines must export 300,000 metric tons (MT) of rice by 2016 to compensate for mandatory rice imports under an agreement with the World Trade Organization (WTO).
The Department of Agriculture (DA) said on Monday its hands are tied in dealing with WTO, which imposes sanctions on countries that do not abide by trade agreements.
While WTO has been a boon to traditional rice-exporting countries, it is a bane to countries seeking to feed its own people using its own resources since the organization, the successor of the General Agreement on Tariffs and Trade (GATT), only seeks to stimulate trade and never encourages countries to be sufficient in food.
Dante Delima, agriculture assistant secretary and National Rice Program (NRP) coordinator, practically admitted that the influx of cheap rice would ruin the domestic palay (unhusked rice) structure.
Agriculture Secretary Proceso J. Alcala is insistent about rice and food-staples sufficiency, but the Asian Development Bank (ADB), the think tank of the National Economic and Development Authority (Neda), the World Bank (WB) and others do not see any sense in producing rice locally, arguing that it would be much cheaper to import rice.
According to Pary-list Rep. Teodoro Casiño of Bayan Muna, the trouble with the groups’ position is that they assume climatic aberrations would not affect the Mekong countries that sell the Philippines the rice that they feed to their livestock. He said rice imports only favor countries that subsidize their farmers like Thailand, Vietnam and the United States.
Casiño told the BusinessMirror that the Philippines had long been the butt of jokes in Southeast Asia since the government believes in globalization and free trade, and abides by tariff reduction while other countries in the region do not follow the impositions of the WTO.
Minimum access volume
DELIMA said under the WTO deal, the Philippines has committed to a minimum access volume (MAV) of about 350,000 MT for rice, with tariff of 50 percent.
MAV refers to the minimum volume of farm produce allowed to enter into the Philippines at reduced tariffs, while shipments beyond MAV pay higher rates.
“We want to at least match the volume entering the country so that prices will not be affected,” Delima told reporters during the launch of the National Year of Rice in Quezon City.
He said the DA expects a surge in the number of takers for the MAV, as the government officially stops importing rice this year.
The country imported only 500,000 MT of rice last year, with 120,000 MT taken in by the National Food Authority (NFA) to serve as buffer stock.
In 2011 the Philippines imported 860,000 MT, with the private sector securing 600,000 MT and farmers’ groups taking 60,000 MT.
The NFA imported only 200,000 MT that year.
The DA admitted it is considering importing between 150,000 MT and 200,000 MT this year to serve as buffer stock during the lean season.
“By the end of 2013, after the government stops importing rice, traders can still bring in grains since we have a commitment to the WTO. This may result in an influx of rice in the market, which may pull down prices,” Delima said.
“We want to narrow down our rice-trade deficit. That is why we are preparing our farmers for the export of locally produced varieties,” he added.
Delima also said only special rice varieties such as colored rice (black, red, pink, brown and purple), aromatic white rice and long grain white rice will be exported since they fetch higher prices.
According to him, the Philippines cannot compete in the exportation of ordinary rice so it will focus on premium rice, which can be competitive since these varieties cannot be found in other countries.
“In fact, we will start this quarter the initial shipment of at least 100 MT of rice,” Delima said, with Macau and Hong Kong as buyers.
The agriculture official said the US may also be a viable market, along with other countries, for exotic, organically grown rice. The Middle East and India can be a market for long grain and aromatic rice varieties, while Japan and Singapore may opt for colored and heirloom rice varieties, along with European countries like the United Kingdom, the Netherlands and Belgium.
The Netherlands and Belgium are particularly interested in alternative rice varieties, he added.
In Photo: Farmers tend to a rice field in Bulacan province. (Nonie Reyes)