RP seeks to maintain quantitative restriction on rice

The Philippines formally informed the World Trade Organization (WTO) of its intention to enter into negotiations meant to extend the country’s quantitative restrictions (QR) on rice.

Edsel T. Custodio, the country’s permanent representative to the WTO wrote Magdi Farahat, chairman of the WTO committee on agriculture and Jo Lomas, WTO committee on market access, about the Philippines’ request that the QRs on rice be maintained.

Agriculture Secretary Luis Lorenzo Jr. said the government has a mandate from President Arroyo to negotiate for the country’s QR on rice.

Under WTO rules, countries implementing QRs on specific commodities should inform the world trade body of their decision to continue such policy a year before the QR expires. In the case of the Philippines, the QR on rice lapses on June 2005.

The Philippines is one of only two countries still practicing QR on rice.

Previously, Agriculture Undersecretary Sigfredo Serrano Jr. said the decision to extend the QR could be granted by rice exporting countries such as Thailand and China, but it is expected that these countries will also ask for concessions in exchange for agreeing to allow the Philippines to continue protecting its rice sector.

Local farmer organization such as the Philippine Peasant Institute (PPI) have repeatedly been opposing proposals for the government to lift QR on rice.

WTO rules state that QR imposed on commodities, when lifted will be replaced by tariffs to protect domestic industries from trade liberalization.

PPI said however, that tariffs for one, do not provide enough shield to local rice farmers.

Farmers said that even if imported rice such as those coming from Thailand and Vietnam, major rice-producing countries in the ASEAN, are imposed high tariffs of about 100 percent, this will still be cheaper than locally-grown rice because competing countries’ production costs are lower and heavily subsidized by their respective governments.

Moreover, PPI said tariffication is only the first step to full-scale liberalization.

"Although tariffication means replacing the QR with an equivalent level of protection, such protection will only be short-lived as WTO rules prescribe subsequent reduction of tariffs," said PPI previously.

Unlike other rice-producing countries in Asia, the Philippines’ rice sector has been very uncompetitive, mainly because the sector has not been getting adequate support from the government.

While high-yielding varieties are being planted in many provinces, most small farmers have difficulty adapting new technology which they said are too expensive, along with other costly inputs such as fertilizers and pesticides.

Moreover, only about half of the country’s rice farms enjoy the benefits of irrigation, while other required post-harvest infrastructure such as drying and milling facilities and farm-to-market roads are sorely lacking.

Thus, the Philippines continues to be a net importer of rice even as the goverment claims the country will be self-sufficient in rice in the next few years.