January 5, 2018
MANILA – At least 38 rice-producing provinces and a city will have competitive advantage over Thailand and Vietnam in rice production should the 35 percent tariff be levied on rice imports and the quantitative restrictions (QR) be lifted.
Results of the preliminary analysis conducted by the National Economic and Development Authority’s Agriculture, Natural Resources and Environment Staff (ANRES) show that the rice production in at least 39 areas will remain competitive with a PhP4.00 per kilogram cost advantage over rice imports tariffed at 35 percent.
“Rice per kilogram in these areas will be P4 cheaper compared with Thai and Vietnamese rice. And these provinces can produce about 73 percent of the total food requirement of the country,” Socioeconomic Planning Secretary Ernesto M. Pernia said.
The areas deemed competitive are: Nueva Ecija, Kalinga, Pampanga, Bataan, Biliran, Bulacan, Zamboanga del Sur, Isabela, Bukidnon, Nueva Vizcaya, Laguna, Pangasinan, Lanao del Norte, Aurora, Compostela Valley, Albay, Leyte, Zamboanga Sibugay, Negros Occidental, South Cotabato, Camarines Sur, Zamboanga City, Sultan Kudarat, Sorsogon, Cavite, Palawan, Antique, Iloilo, Aklan, Surigao del Sur, Capiz, Masbate, Catanduanes, Eastern Samar, Northern Samar, Basilan, Western Samar, Guimaras, and Maguindanao.
Among these 39 areas, however, 14 have an average yield of 3.5 metric tons per hectare (mt/ha), which is below the national average of 4 mt/ha. These provinces are Palawan, Antique, Iloilo, Aklan, Surigao del Sur, Capiz, Masbate, Catanduanes, Eastern Samar, Northern Samar, Basilan, Samar, Guimaras, and Maguindanao.
Producing rice at lower costs, these provinces can still further increase their yield levels by using certified inbred and hybrid seeds, proper management of input application and sufficient irrigation.
The study of ANRES also shows that seven provinces which were not included in the 39 competitive ones have an average yield higher than the national level (4 mt/ha). These high-yielding provinces, however, are producing at relatively higher costs.
NEDA said that in order to be competitive, rice-producing provinces should reduce the cost of rice production by mechanizing labor-intensive farm activities, using new and appropriate technologies and applying farm management practices.
Apart from these, NEDA suggested measures to boost competitiveness, including constructing more irrigation systems, addressing gaps in infrastructure connectivity, improving farmers’ access to affordable credit insurance, and adopting measures to enhance agriculture’s resilience to climate change, among others.
The QR on rice imports is a special privilege granted by the World Trade Organization (WTO), which has been extended three times since it was first imposed in 1995. Last April 2017, before the termination of the WTO Special Treatment on rice, President Duterte issued Executive Order No. 23 retaining the MAV level of 805,200 MT and extending the lower tariff rates imposed on some commodities for three years or until the Agricultural Tariffication Law is amended.
NEDA is pushing for the amendment of the Republic Act No. 8178 or the Agricultural Tariffication Act of 1996 to pave the way for the removal of the QR on rice imports and the imposition of the 35 percent tariff rate instead.
“The revenue from the 35 percent tariff can be used to supplement available government funds to develop the agriculture sector and bring it at par with our Asean counterparts,” Pernia said.