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Rice import quotas lifted

But private traders must pay 50% tariff

By Christine Avendao
Philippine Daily Inquirer
First Posted 00:40:00 04/08/2008

Filed Under: Food, rice problem, International (Foreign)Trade

MANILA, Philippines?As part of its effort to ensure an adequate supply of affordable rice in the country, Malacaang has lifted the quota on rice importation by private traders.

President Gloria Macapagal-Arroyo approved the lifting of the import quota on rice and corn, ?but the tariff must be paid,? Cerge Remonde, head of the Presidential Management Staff, said Monday.

The private sector is allowed to import a maximum of 300,000 metric tons of rice annually. But private traders have imported less than 10 percent of that volume over the past two years because of high world prices and the tariff.

The bulk of Philippine rice imports is accounted for by the National Food Authority (NFA).

Remonde said ?any businessman can now freely import rice and corn for as long as they pay the right amount of duties and taxes.?

The import tariff on rice is currently at 50 percent. Last week, the President rejected a proposal by the World Bank to cut the tariff.

?Parties who want to import rice will be allowed to do so upon filing for a permit to import with the NFA and the payment of appropriate taxes,? Agriculture Arthur Yap said Monday night.

Cabinet Secretary Ricardo Saludo said the Cabinet recently discussed the proposal to lift the quota on rice imports.

?There was an agreement to move toward the opening of rice imports but with tariffs unchanged,? Saludo said.

The country has been increasingly importing rice to cover production shortfalls. From 722,000 metric tons, imports rose to 1.7 million in 2006.

This year, the Philippines, which has become the world?s biggest importer, will buy 2.2 million metric tons of rice abroad. It seeks to import rice from countries like Vietnam, Thailand and the United States.

Rice is a political commodity in the Philippines and any shortages could cause unrest.

Prices of rice, the staple of more than 2.5 billion people in Asia, have soared because of tight global supplies, prompting countries like Vietnam, India, Cambodia and Egypt to impose export controls.

The price of Thai grade B rice, a widely traded variety, rose to $795 per ton last week, up by 147 percent from a year earlier.

Land conversion, weather problems?typhoons in the Philippines, a cyclone in Bangladesh, flooding in Vietnam and Indonesia?higher fuel, transportation and fertilizer costs, population growth, and hoarding have pushed rice prices up.

Responding to Ms Arroyo?s call for a crackdown on hoarders, the Department of Justice has threatened to charge traders found hoarding the cereal with economic sabotage or plunder, which carries a life sentence.

To make government-subsidized rice more readily available to the poor, the NFA has started selling 1-kilo packs at P18.25 each.

It has also promised a P5-billion subsidy to farmers.

Last week, the President approved a P43-billion rice production program.

At Tuesday?s Cabinet meeting, Ms Arroyo and her Cabinet will tackle for the third straight week the rice problem in the country.

The Palace has invited the leaders of the Grains Retailers of the Philippines led by its president, Teresita Lizado, and other representatives of the private sector from the grains industry to attend the Cabinet meeting in Malacaang, according to Remonde.

Remonde said Yap would make a presentation on the rice supply and distribution situation.

The meeting will also be an occasion for rice retailers to air their side on the government move to cancel the licenses of traders selling NFA rice due to reports that some dealers were selling the grain, the cheapest in the country, as commercial rice.

Cancellation of licenses

During the National Food Summit in Clark last week, the President said rice traders had complained about her order to cancel their licenses to sell NFA rice.

?We will hear the complaint in our Tuesday Cabinet meeting because we have required them to apply all over again for accreditation,? Ms Arroyo had said.

Also expected to be taken up at Tuesday?s Cabinet meeting are plans of government-owned and controlled corporations and some government entities to use 5 percent of their 2007 budget surplus for rice production, according to Saludo.

Saludo said the government agencies had a combined surplus of more than P100 billion last year.

Remonde also appealed to the opposition to help the government address the rice problem.

?The food crisis is a problem not akin to the Philippines alone. It?s a worldwide problem,? the PMS chief told reporters.

?We appeal to all sectors, including the political opposition, to cooperate with the government in addressing the issue instead of taking advantage of this to enrage the people against the government,? he said.

Traders? complaint

Following reports that some rice traders in Cebu were scared to buy and stock up on rice lest they be accused of hoarding, Remonde reminded the National Bureau of Investigation and other agencies running after hoarders and smugglers to ensure that their operations were against legitimate targets.

?Let us see to it that our operations will not hurt individuals,? he said.

He said the Bureau of Customs, Philippine Ports Authority and Philippine National Police should facilitate the release of all rice and corn imports so long as the tariffs had been paid.

Remonde said the government was also open to a dialog with these rice traders.

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