Liberalize rice imports, PIDS urges gov’t

The negotiated exemption of rice from the Philippines’ World Trade Organization commitments will expire next year.

As such, economists believe that the Philippines should not negotiate a further extension of the special treatment for rice under the WTO.

In a policy note for the Philippine Institute for Development Studies, economists said the expiration of the exemption for rice provides “a rare opportunity” for reform and requires political will from the government to seize it.

“The Philippines has been, and shall continue to be, a major rice importer,” economists said, adding that rice self-sufficiency is neither necessary nor sufficient for food security.

The study recommends that, after 2012, rice quantitative restrictions, or the quota set by the NFA on the volume of imports, should be replaced with customs duties.

This, economists said, will help ensure enough supply of rice in the country, given that the Philippines, being an archipelago, lacks the contiguous land area for rice growing. This is why output cannot keep up with the demands of a population that grows at 2 percent per year, on the average.

“To ease the adjustment and defuse political opposition, the country can negotiate a member’s commitment with the WTO to maintain high-bound tariffs—at levels comparable to historical nominal protection rates— in exchange for the removal of the special treatment. The ceiling, however, should be scheduled to decline within a reasonable time frame, say, seven to 10 years, toward levels closer to average tariff rates,” economists said.

The WTO’s provision for agriculture market access encourages the removal of import quotas, but allows protection for certain “sensitive” products. Rice, being the Philippines’ staple food, has been exempted from import liberalization from 1994 to 2005. After 2005 the country negotiated to keep the import limits until 2012, in exchange for lower tariff rates on some agricultural products, as well as increased minimum access for rice.