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Group backs move to relax rice imports

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Group backs move to relax rice imports

Lower prices, hunger reduction seen
/ 12:04 AM September 12, 2016

A GROUP of prominent economists has hailed the Duterte administration’s plan to liberalize rice importation in the country through the removal of limits on the volume of the staple that can be brought into the country.

In a statement on Friday, the Foundation for Economic Freedom (FEF)—an organization dedicated to market-oriented reforms, well-defined and secure property rights, consumer welfare and good governance—welcomed the Duterte Cabinet’s decision not to seek an extension of the quantitative restrictions (QRs) on rice that would lapse by June next year.

QR refers to the trade restriction on the amount of an item or service that can be imported into the country, a form of trade barrier that, in turn, is seen to distort the pricing of affected goods and services.

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“Non-extension of quantitative restrictions on rice will pave the way for the liberalization of rice imports, which will lead to lower rice prices, reduction in hunger and lower inflation,” the FEF said.

“Lower rice prices and higher disposable incomes for the poor, in turn, will boost the country’s competitiveness, improve quality of life and lead to a reduction in malnutrition,” the organization added.

The FEF cited reports showing that the previous administration’s policy of high rice prices due to the limiting of rice imports to encourage rice self-sufficiency had resulted in higher poverty incidence and increased malnutrition.

The FEF also urged the Duterte administration to institutionalize the liberalization of rice imports by seeking legislation to abolish the National Food Authority’s virtual legal rice monopoly.

“Instead of being a monopoly rice trader, the NFA should be limited to an agency maintaining rice buffer stocks against an unpredicted rice shortage,” the FEF said.

“We also recommend the imposition of reasonable tariffs on rice imports under a regime of free rice trade. The tariff revenue raised should then be used to help rice farmers to increase their productivity or diversify into higher value-added crops,” the group said.

The World Trade Organization (WTO) has allowed the Philippines to extend its QR on rice until June 30, 2017, to allow local farmers to prepare for free trade given the government’s goal of achieving rice self-sufficiency. The extended QR imposes a 35-percent duty on imported rice under a minimum access volume (MAV) of 805,200 metric tons. Importation outside of the MAV limit are slapped with a higher tariff of 50 percent.

The Philippines has kept the QR on rice since 1995, or since joining the WTO.

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