The forum on Expiration of the Waiver for Quantitative Restrictions on Rice Importation by June 2017: Options for Food Policy held last 28 February 2017 at Conference Rooms 3 and 4, Ramon V. Mitra Building, House of Representatives was organized by the Congressional Policy and Budget Research Department (CPBRD) and the Philippine Institute for Development Studies (PIDS). Dr. Roehlano M. Briones, Senior Research Fellow of PIDS and Dr. Mercedita A. Sombilla, Assistant Secretary and Director of ANRES, National Economic and Development Authority (NEDA) were the key resource persons in the event.
In her opening remarks, Dr. Marife M. Ballesteros, OIC, Vice President of PIDS, explained that since 1996, the country has been receiving special treatment from the World Trade Organization (WTO), extending its restrictions on rice importation up to June 2017. She added that economic managers of the Duterte administration agreed that it is time to remove the restrictions. However, the Department of Agriculture (DA) proposed that QRs should be extended for another two years to give farmers more time to be competitive.
In the forum presentation, Dr. Briones discussed the issues on the expiration of QR on rice importation. He narrated that every time the QR was extended, rice and non-rice concessions have also been increasing. Minimum access volume (MAV) for rice or the level that the country had to allow rice entry had been increased from 119,460 MT in 1995 to around 805,000 MT in 2012. Import tariffs, on the other hand, had gone down from a uniform rate of 50% in 1995 to the current “35% in-quota-50% out-quota” volume. Meanwhile, tariffs of imported dairy and meat products were reduced as part of non-rice concessions. He also explained the policy gridlock on whether to extend the waiver or not between the DA and NEDA.
He then stressed the implications of the country’s rice importation policies—especially the NFA Charter, Magna Carta of Small Farmers, WTO ratification by the Senate in 1995, Agricultural Tariffication Act of 1996 (RA 8178), and the QR extensions. Under RA 8178 which enables the implementation of WTO provisions on agriculture, QR expiration is not time-bound contrary to the WTO obligation. Dr. Briones emphasized that this is a major concern since both policies are not aligned with one another. He added that with these contradictory policies, the private sector was able to import rice even after the 2012 QR expiration.
To cap his presentation, Dr. Briones proposed three options in moving forward. First is to request for another waiver until 2019. However, there is no certainty that the WTO will agree and other Member States will surely negotiate for further concessions. He added that this may also mean perpetuation of high rice prices. Second is to maintain QR regardless of the WTO decision. But taking this alternative opens the possibility of a lawsuit from other WTO member countries. Finally, the third option is to agree to convert QR into tariffs, allowing the private sector to import freely subject to import duty. Congress, however, has to pass a law providing for safety nets like the imposition of a reasonable tariff rate equivalent and ploughing back tariff collection from rice imports to the rice sector.
In her presentation, ASec. Sombilla discussed how to move towards the lifting of the QR and the tariffication of rice. The immediate action is to notify the WTO of the Philippines’ position not to extend the QR at least 90 days before the expiration, and simultaneously indicating that concrete tariffication process is now in progress. She pointed out that Congress plays a crucial role in passing measures towards rice tariffication and in reviewing NFA’s role as the sole rice importer. She added that there are strategies in the newly formulated Philippine Development Plan 2017-2022 to improve productivity and competitiveness of the rice industry.
Response from Stakeholders/Open Forum
In the open forum, Cong. Rosanna V. Vergara of the 3rd District of Nueva Ecija, inquired if the Philippines is the only country with QRs on rice importation. Dr. Briones answered that aside from the Philippines, there are several holdouts but these countries were already negotiating for a tariff equivalent with the WTO. Thus technically, the Philippines is the last holdout. Cong. Vergara further expressed the concerns of farmers in her district. She narrated that the problems of farmers in 1983 are still the same concerns they face today. Cong. Vergara suggested that programs and projects should be implemented properly at the grassroots level, and that funds should trickle down to farmers to make positive impact.
ASec. Sombilla answered that the rice enhancement program will be put in place before the expiration of the waiver, and the provision to create a rice enhancement fund will be included in the amendments to RA 8178. She also confirmed that proper implementation of the rice program is key in enhancing the productivity of farmers.
Cong. Rodante D. Marcoleta of SAGIP Party-list asked about the time-frame given to them to help address the issue. ASec. Sombilla answered that there were already talks and consultations long ago about the QR from concerned agencies. However, in the series of meetings, different views/approaches from various stakeholders (NEDA, DA, farmers’ groups, etc.) should be considered to strike a balance to reach an agreement on how to address the issue.
Mr. Romeo “Ka Omie” Royandoyan of CentroSaka disagreed with the presentation and findings of PIDS and NEDA. He pointed out that based on numerous consultations, around 95% of rice farmers is not in favor of the removal of the restrictions. He explained that there will no safety nets for farmers once QR is removed. A study was also given to NEDA proposing not to remove the restrictions as assistance to farmers, with subsidy for irrigation and credit support still inadequate. Mr. Royandoyan strongly recommends that Congress should consult farmers before amending the Tariffication Law.
Dr. Lynly Palma-Dela Cuesta of the Tariff Commission updated the body that a public hearing was held last 16 February regarding the amendment of EO 190 series of 2015. She added that position papers from various stakeholders were already received, and they are in the process of finalizing the report to be presented in another public hearing.
Atty. Elias Jose Inciong of the United Broilers Association narrated that he is amenable with Options 1 and 2 of Dr. Briones, provided that there should be better governance in the Bureau of Customs. He pointed out that the government cannot properly implement the Anti-Dumping Law, and other related laws. He recommended that the government should address these issues first to be truly competitive in the trade market. On Option 3, he explained that before we move to tariffication, an in-depth study on special safeguards of agriculture products under RA 8800 should be undertaken.
In his closing remarks, Dr. Romulo E.M. Miral Jr., Director General of the CPBRD, concluded that with the different views presented in the discussion on the removal of QR on rice imports, his task should be more apt as an “opening statement”. He pointed out that the government and other stakeholders should focus on concrete steps to be undertaken to ensure agricultural competitiveness in the country. He added that institutions at the policy level should strongly consider the actual situation at the grassroots level. Further studies should also be made, focusing on the impact of the QR and its removal at the household level. Finally, Dr. Miral emphasized that sectors of society should work together in supporting the agriculture industry to become more competitive.
Expiration of the Waiver for Quantitative Restrictions on Rice Importation
by June 2017: Options for Food Policy
Conference Rooms 3&4, Ramon V. Mitra Building
House of Representatives, Batasan Hills, Quezon City
28 February 2017, Wednesday
1:00 PM - 4:00 PM
P R O G R A M M E
|1:30-1:40||National Anthem / Invocation|
DR. GILBERTO LLANTO
President, Philippine Institute for Development Studies
Senior Research Fellow
Philippine Institute for Development Studies
Asistant Secretary and Director of ANRES
National Economic and Development Authority
|2:50-3:50||Response from Stakeholders/Open Forum|
DR. ROMULO E.M. MIRAL, JR.
Director-General, Congressional Policy and Budget Research Department
NOVEL V. BANGSAL