Lifting of rice import restriction with lower import duties
will not guarantee low priced-rice, says Rice NGO

April 10, 2008

“Extending the tax subsidy of National Food Authority (NFA) to private traders and importers will not guarantee low-priced rice in the market and will deny the government of needed revenues to improve local rice production,” said Jessica Reyes-Cantos, lead convenor of Rice Watch and Action Network (R1).

Cantos said imported rice even with only 10 percent tariff on top of it will result to as high as P36 per kilo, almost double the existing price of NFA rice at P18.25. R1’s computation based on the average world market price of $747 per metric ton of rice in the international market will end up at P36.15 per kilo in the local market with the tariff reduced to 10 percent and giving the rice trader only 10 percent margin for packing and hauling expenses.

Agriculture Secretary Arthur Yap announced yesterday the government’s plan to extend the tariff subsidy of NFA to private traders. Some newspaper accounts said the government will charge P2 per kilo of imported rice to private traders as service fee while some reported extending the 10 percent tariff enjoyed by the NFA to private importers.

“The traders will definitely make a substantial gain with lower tariffs to boot and the price outlook not about to get better in the next three months. The people are scourging for low-priced NFA rice and the government will have nothing in its shelves to provide for the people because the private traders are controlling the bulk of the country’s rice inventory,” said Cantos.

Cantos explained that the price of rice in January this year was only $430 per ton and sharply rose to 73 percent at the present price of $747 per ton, in a matter of three months. She said

lifting the import restrictions will also open the floodgates for unscrupulous price speculators among the rice traders who have the financial capital to import even as rice prices continue to soar in the global market.

“The situation is not ordinary and particularly critical in the lean season of July to September when the private traders can definitely take advantage of the situation. We doubt if the government will be able to stop private traders from dictating higher prices during this period when the NFA failed to abet the skyrocketing prices despite the harvest season this April,” added Cantos.

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