When the QR regime on rice expires, here’s what researchers think should take its place
THE Philippines’ temporary use of quantitative restrictions (QR) on rice was intended to avert a dampening of rice prices, but the threat of their expiry has some parties casting about for possible alternative schemes that will support farmers once restrictions on imports are loosened.
Samahang Industriya ng Agrikultura, Inc. President Rosendo O. So, said the QR did not serve its purpose with more rice imported than the cap set under the minimum access volume because of government-to-government importation.
“But this remains merely on paper. Our QRs did not curb rice imports; we have been importing more than the required QRs, excluding smuggled rice, for the past 10 years,” said Mr. So in a text message over the weekend.
“QRs have been used by previous governments as self-promotion to say that they are protecting the industry. QR or no QR, the government must address the real problems besetting the rice industry,” he added.
The QR is a non- tariff measure imposed by a member of the World Trade Organization ( WTO) to limit the volume of imports of a particular commodity over a particular period.
The grain is the only commodity in the Philippines that enjoys special treatment, granted to the country upon acceding to the WTO in 1995. Annex 5 of the Agreement on Agriculture negotiated during the Uruguay Round of the General Agreement on Tariffs and Trade allowed its members to apply for special treatment in respect of the designated products by complying with certain provisions under the deal.
The waiver’s validity ended 10 years later but continued on for seven years after the Philippines lobbied for an extension, granted in 2007. As a trade-off, the country agreed to increase its minimum access volume (MAV) for rice to 350,000 metric tons (MT) with a reduced tariff of 40% in-quota from 119,460 MT at 50% in-quota and a cut in tariff rates, among other trade arrangements, covering other agricultural products.
This continued until the 2012 expiry, after which the country negotiated another extension in a bid to buy more time to prepare local farmers for the liberalization of trade. The Philippines traded off additional rice volumes under the MAV scheme which is currently at 805,200 MT with an in-quota rate of 35% and a most favored nation rate (MFN) of 40% for volumes outside the MAV.
Through this arrangement, the Philippines was given more time to achieve self-suff iciency in rice, a move expected to counter the damaging impact of the expected influx of cheap rice imports after the QR is scrapped.
The government has long expected an influx of cheap rice once the country’s privilege to use the quantitative restriction expires.
Previous administrations have also long been attempting to prepare for this by attaining rice self- sufficiency which has never been achieved, though the country came close in 2015 with a 97% ratio of domestic production to demand.
The country was hit by a severe dry spell during the period — which intensified in early 2016, possibly galvanizing the rice industry to make an extra push to boost rice yields and achieve greater resilience against climate change.
A study conducted by the Philippine Institute of Development Studies has charted possible moves the government could undertake to cushion the blow on farmers post- QR.
PIDS Research Fellows Roehlano M. Briones and Lovely Ann C. Tolin noted that decoupled payments are the best option to support farmers. —