Duterte’s scrapping of rice import quotas draws mixed reactions

Saying he wants to boost the country’s rice inventory, President Rodrigo Duterte has scrapped the quota system in rice importation and allowed importers to ship in the staple grain as long as they pay the correct taxes.

In a speech on Thursday in Davao City, a transcript of which was released by Malacañang on Friday, the President said he did not believe that there was a shortage but the country should have enough  rice supply.

“I have done away with the quota-quota. You can import rice, all of you. No more paperwork. And if there is somebody from (National Food Authority), (Bureau of Internal Revenue), Customs who would (be) … asking money from you, slap him. Try to slap him,” he said in a speech before members of the Grand Masonry.

‘Really no shortage’

The event was off-limits to media.

“There was really no (rice) shortage,” he said, adding that he had instructed government officials to make sure that rice stocks were always sufficient.

“I said, ‘Guys, I want to see rice up there, touching the ceiling of this warehouse. Now,’” the President said.

The President’s deregulation of rice imports drew mixed reactions from industry stakeholders on Friday and came before Agriculture Secretary Emmanuel Piñol announced that the country would increase production next year in anticipation of a bigger demand in China.

Cathy Estavillo, spokesperson for Bantay Bigas, said the removal of import quotas would put local farmers at a disadvantage.

“We condemn this move by the President. This would result in the liberalization of the rice industry with only low tariffs to protect the farmers,” Estavillo said.

The rice import quota is under the quantitative restriction scheme as part of the country’s obligation to the World Trade Organization (WTO). In exchange for lower tariff rates and more flexible trade pacts, the country allows the entry of rice produced by other countries.

“It is alarming because the tariff to be imposed on imported rice is very low at 35 percent. Without enough government support, the farmers will not be able to compete with cheaper imported rice,” Estavillo said.

‘Insignificant protection’

Under a bill being reviewed in the Senate, a tariff rate of 35 percent would be imposed on rice that would be imported from WTO member-countries. Rice coming from non-WTO members would have to be assessed a higher tariff rate of 50 percent.

But for Rosendo So, chair of Samahang Industriya ng Agrikultura (Sinag), the WTO restriction “has always been an insignificant protection” because the country had been importing “more than double the import quota for the past decade.”

“This is advantageous to us and to the traders because we would be able to buy cheaper rice. But we are worried about the farmers,” said James Magbanua, president of the Grain Retailers Confederation of the Philippines.

“With the arrival of more imported rice, prices will surely go down and benefit the consuming public,” he added.

In a news conference in La Trinidad, Benguet, Piñol said the President’s move would not destabilize the country’s rice industry, contrary to warnings by some industry groups, given the tight supply of rice in the world market.

Not much to go around

“There’s not much rice to go around and be freely traded or be accessed by countries who need it … Even if we say that the (quantitative restriction) is lifted and the market is open, there will be not much rice,” said Piñol, who has assumed supervision of the National Food Authority (NFA).

He admitted that the new policy would benefit the traders, but he said farmers would not be put too much at a disadvantage because of the tight supply in the world market.

Piñol also said the country would increase rice production next year because China might import more rice and further deplete the already thin global supply.

“China might import 5 percent of its rice needs from the world market,” he said, which is equivalent to an average of about 39 million metric tons.

Should China proceed with its plans, it would purchase the equivalent of 15 million MT, the agriculture chief said.

Rather than supply rice to the Philippines, (rice growers) would choose to supply China, which can buy the rice at a higher price … This is a good opportunity for Filipino farmers to plant more rice this year,” Piñol added.

Rex Estoperez, spokesperson for the NFA, said the President’s decision was the correct course of action given the country’s WTO obligations.

Mr. Duterte said the government’s low rice inventory had angered him. The lack of supply at NFA warehouses across the country over the past few weeks triggered increases in prices of the staple in the markets. —REPORTS FROM ALLAN NAWAL, KARL R. OCAMPO AND KIMBERLIE NGABIT-QUITASOL