PhilRice emphasized that cheaper imported rice not favorable to country
Philippine Rice Research Institute (PhilRice) emphasized that cheaper imported rice will not necessarily be favorable to the country and that the government must replace quantitative restriction (QR) policy with its tariff equivalent.
“As our commitment to the World Trade Organization, we now have to replace our quantitative restriction policy with its tariff equivalent,” said Flordeliza H. Bordey, senior socio-economist of the DA’s Philippine Rice Research Institute (DA-PhilRice).
These policy amendments are now at the House of Representatives and the Senate awaiting to be enacted into laws.
When fully implemented, the government can no longer restrict the total amount of rice to be imported in the country.
Bordey explained that when QR is lifted, importers can bring in rice from ASEAN member-countries as long as they see it profitable with the 35 percent tariff as our only protection.
A PhilRice-International Rice Research Institute (IRRI) study estimated that imported rice from Thailand and Vietnam will be around P31 and P27 per kilogram, respectively.
This scenario is favorable to consumers, especially for poor families who spend about a third of their income to food expenses. However, Bordey warned that lower prices of imported rice will also reduce the price of locally-produced rice.
“This will have a negative impact on the income of our rice farmers who, at present, only produce an average of 3.87 t/ha at a cost of P12/kg,” she added.
Hence, the 6 tons per hectare at P8/kg cost is what the DA is targeting to maintain the farmers’ profit margin even when cheaper imported rice penetrates our local market.
“This means that rice farmers, say in Nueva Ecija, who spend P48,000 per hectare on average must have a yield of around 6,000 kilograms or 6 tons to survive the competition,” Bordey cited.
While some experts criticize that the 6-ton target is quite ambitious, DA is confident that this is feasible with strategic interventions in place.
Currently, the Department of Agriculture is making farm production credit more accessible through Production Loan Easy Access (PLEA) to encourage farmers adopt high-quality hybrid or inbred seeds, apply proper amount of fertilizers, and engage farm machine service providers.
Beyond a medium term plan, however, experts say that efficiency in the marketing level aside from production is necessary to sustain the country’s competitiveness.