Local traders may start applying for permits to import rice under the minimum access volume (MAV) scheme on August 29, according to the guidelines released by the National Food Authority (NFA) on Wednesday.
The NFA released Memorandum Circular AO-2017-08-002, which detailed the guidelines for the importation of 805,000 metric tons (MT) of rice under the MAV scheme of the World Trade Organization (WTO). Imports within MAV are usually slapped a lower tariff.
“Rice importation under this program shall be pursuant to Republic Act 8179 and the July 24, 2014, decision of the WTO on waiver relating to special treatment for rice of the Philippines,” Cabinet Secretary Leoncio B. Evasco Jr., who is also the NFA Council (NFAC) chairman, said in the memorandum circular.
Under the importation guidelines, rice traders are allowed to source from countries with a specific quota and from omnibus origin, or other rice-producing countries.
Rice traders and farmers’ groups can import 293,100 MT of rice from Thailand and Vietnam. They can also import 50,000 MT of rice from China, India and Pakistan; 15,000 MT from Australia; and 4,000 MT from El Salvador.
“No applicant shall apply, directly, or indirectly, for an import volume allocation under this program in excess of 20,000 MT for crop year 2016-2017,” Evasco said.
Evasco noted that well-milled rice imported under the 2017 MAV program will be slapped a 35-percent tariff. The quality should also not lower be than 25-percent brokens and/or any special rice variety.
The NFAC, the highest policy-making body of the NFA, has divided the shipment of rice imports under the 2017 MAV into two phases: first, starting from December 20 until February 28, 2018; and the second phase covering June 1, 2018, until August 31, 2018.
NFA Deputy Administrator for Marketing Operations Tomas R. Escarez told the BusinessMirror that the NFAC scheduled the arrival of rice imports in two phases to ensure imported rice would not depress palay prices.
“The reason behind this is to ensure that its arrival will not coincide with the harvest season, which usually ends on the second week of December. So we allowed imports to arrive between the second week of December until February 28, when there is no harvest of rice,” Escarez said in an interview.
“Imported rice will also be allowed to arrive in the country from July to August, because again, these are the lean months for palay. So, this will not affect local producers,” he added.
While most of the rice imported under MAV could arrive within 2018, Escarez said the NFA’s decision to purchase rice from abroad to beef up its buffer stocks would depend on the supply situation next year.
“The importation of 805,200 MT is not usually totally availed because some of the rice come from Australia, China. Usually we do not source from those countries because we import from Asian countries, like Thailand and Vietnam,” he added.
After interested importers have filed their letter of intent, the NFA MAV prequalification team will conduct the validation and authentication of all the requirements submitted by the applicants.
The team will also verify if the applicant is a party to any case or investigation for rice smuggling, hoarding, unauthorized rebagging or resacking of government stocks to commercial sacks, diversion and cornering activities.
“The validation would take about another 30 calendar days. So the issuance of certificate of eligibility [COE]will be around first week of November,” Escarez said.
He added one of the significant changes in the 2017 MAV importation program is the decision of government to allow rice traders to decide when and how much they will import. For example, traders could choose to import 40 percent of their volume allocation during the first phase and the remaining 60 percent during the second phase of the MAV program, according to Escarez.
“Before, when they receive the COE, they automatically pay 50 percent of the tariff. But now, if you only decide to import 40 percent of your volume during phase 1, they will only pay half of the tariff for the 40-percent volume,” he said. “The remaining tariff shall be paid by the importers once, before the clearance of customs, when their shipments arrive.”
Under the guidelines, all rice importers are also required to register with the Bureau Plant Industry-National Plant Quarantine Services Division prior to the conduct of negotiation and actual importation.
Last year, the NFA allowed 210 farmers’ organizations and private firms to import 692,340 MT of rice, 110,160 MT less than the 2016 MAV volume of 802,500 MT.