The Department of Agriculture (DA) warned that the lifting of the quantitative restriction (QR) on rice next year would discourage farmers from planting the staple and widen the country’s rice-supply shortfall in 2018.
Agriculture Secretary Emmanuel F. Piñol said the Philippines would also be hard pressed to beef up its stocks by importing rice in 2018 due to the projected tightness in global rice supply. Manila imports an average of 1 million metric tons of rice annually to boost its stocks, especially during the lean months.
Citing rice trader Jeremy Zwinger, Piñol said production problems that will confront China and the huge importation of Egypt could result in a global rice shortage in 2018 and 2019.
“So, if the production of China is threatened and Egypt will import 500,000 metric tons of rice, then lifting the QR would make it difficult for us to import rice should there be a shortfall in local production,” Piñol told reporters on Tuesday.
The DA chief said removing the rice-import quota next year would also make it more difficult for farmers to produce enough rice to meet the requirements of Filipino consumers.
In light of Zwinger’s projection of a global rice shortage, Piñol urged the country’s economic managers to consider extending the QR on rice.
“If we won’t [extend] it and the projection happens and our farmers would do away with planting rice, then we have a big problem,” he said.
Piñol said the DA has started its consultation with rice farmers nationwide to get their views on the lifting of the QR next year.
According to the World Trade Organization General Council Ruling, the Philippines should subject rice imports to ordinary customs duties right after the QR-waiver extension expires on June 30, 2017.
To do this, Congress needs to amend Republic Act (RA) 8178, which allowed the Philippines to retain the nontariff barrier on rice, according to Agriculture Undersecretary Segfredo R. Serrano.
Undersecretary Maia Chiara Halmen Reina A. Valdez of the Office of the Cabinet Secretary said the National Economic and Development Authority (Neda) has started drafting a bill to amend RA 8178, or the Agricultural Tariffication Act, to replace QR with tariffs.
Earlier, an official of the Neda told the BusinessMirror that the agency would recommend to the President a tariff ranging from 40 percent to 50 percent once the country converts the rice-import quota into tariffs.
The QR, a nontariff barrier, has allowed Manila to limit the volume of imported rice that will enter the Philippine market.
The Neda and some economists have pushed for the removal of the rice QR to make the staple more affordable to the poor.