Thailand seeks guaranteed rice export quota to RP

Thailand wants to be guaranteed a rice export quota  in exchange for its support to the Philippines’  decision to maintain its quantitative restrictions (QR) on rice.

Agriculture Secretary Arthur Yap said the Thai government’s position is being closely studied to determine if an allocation of the country’s rice import requirements to a specific country is legal.

"We have to study and seek legal opinion because we do not want to violate existing laws," said Yap, referring to government’s procurement laws which states that all government purchases should be auctioned or done through a public bidding.

An official of the National Food Authority (NFA) said the agency, which is tasked to oversee the country’s rice and corn importations, sought the opinion of the Department of Justice last month.

"We want to know if the NFA for instance, could make an exemption in cases like this and go for a negotiated deal," the same source said.

Yap said the government also has to find out if Thailand rice prices under a rice export quota would be based on prevailing market prices or if these will also be negotiated.

Thailand was earlier said to be asking for an allocation of its sugar exports instead of rice. Aside from being a major rice supplier in the world market, Thailand is also a big sugar producer in the region.

Thailand is one of eight countries under the World Trade Organization that formally indicated their intention to negotiate with the Philippines on its bid to retain QR on rice imports.

China, United States, Australia, Canada, Pakistan, India and Argentina also said they will negotiate with the Philippines on the issue of QR on rice.

Last April, the Philippine government filed before the WTO its intention to extend QR on rice imports which lapsed on June 30, 2004. It said maintaining the QR on rice will give local rice farmers time to improve their competitiveness against the surge of cheap rice imports.

By maintaining the QR on rice, the country can limit the volume of imported rice coming into its ports.

Local farmer groups like  the Philippine Peasant Institute (PPI) have repeatedly been opposing moves to lift QRs on rice and replace this with tariff.

PPI said  tariffs do not guarantee protection of local rice farmers.

Farmers said that  imported rice such as those coming from Thailand and Vietnam, major rice-producing countries in the ASEAN, even if  slapped with high tariffs of more than  100 percent, will still come out 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 traffication means replacing the QRs 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 suffers from low productivity, 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 government claims the country will be self-sufficient in rice in the next few years.

The Philippines is the only other Asian country aside from South Korea that still maintains QR on rice imports.