This developed as India wants greater access for its rice in the Philippine market in exchange for supporting Manila’s bid to extend its rice import restrictions.

The Philippines, whose extended QR on rice was supposed to expire in July this year, has sought for an extension up to 2012.

Representative Rafael V. Mariano of the Anak Pawis Party List wants that giving up QRs and putting in place import tariffs would not translate to lower prices of rice.

Aside from India, the Philippines is also facing pressure from Japan which has given up 8 percent of its domestic rice consumption to imports.

The Philippines has given up enough concessions in exchange for QR extension approval.

Earlier, the Philippines granted yearly import allocations to China, 25,000 metric tons (MT); Thailand, 98,000 MT; and Australia, 15,000 MT. Government also expanded minimum access volume from 238,000 to 350,000 MT while cutting MAV tariff from 50 percent to 40 percent.

While cutting down import remains a far-fetched dream, government is continuing to embark on efforts that will reduce rice import including expansion of corn which is a rice substitute or a staple in certain Visayas and Mindanao provinces.

The country’s 2005 imports rose to a seven-year high of 1.8 million MT. Already on the high side, possibilities of imports going up in 2006 is not remote even if government estimates are not yet final.

So far, the government is hesitant to grant its last minute request for more market access for rice.

However, India may be inclined to seek for such quota with the availability of a rice surplus.

Already, Philippine permanent representative to the WTO

Manuel Antonio J. Teehankee, said the government may concede to an increase in its rice MAV.

Mariano stressed that tariffication is only the first step to full-scale liberalization.

Although tariffication means replacing the current QRs with an "equivalent" level of protection, such protection will only be short-lived as the WTO’s rules prescribe subsequent reduction of tariffs.

While Philippine law allows us to impose a tariff of up to 100 percent, the actual tariff equivalent of the present QRs is much lower.

The proposals to convert the present QRs on rice into tariffs are part of the whole package of liberalization and privatization measures aimed at prematurely opening up the country’s rice industry.

In fact, Mariano pointed out that contrary to the Department of Agriculture’s (DA) forecast of agricultural trade gains under the General Agreement on Tariffs and Trade (GATT), our agricultural trade deficit ballooned by as much as 265 percent in 1996 and 427 percent in 1997. The scaling down of trade barriers also resulted in a widening agricultural trade imbalance, with agricultural trade deficit ballooning from US$141 M in 1995 to US$ 1.1 B in 1999. Gross value added in agriculture (GVA) scarcely grew from PhP171 B in 1995 to PhP183 B in 1999. Similarly, employment in the sector, which was forecasted by government economists to increase by at least 500,000 jobs annually from the supposed opening up of new export markets, exhibited very little growth, barely increasing from 11.5 million in 1995 to 11.62 million in 1999.

"Clearly, government’s prescription of removing trade barriers as a way of attaining global competitiveness is not working," he said.

The long-term solution, Mariano said, is for the government to appropriately allocate a budget for the agriculture sector.

He noted that since the agriculture sector accounts between 15 percent to 20 percent share of the GDP, then its budget should also be a commensurate 20 percent.

"At present, it is not even one percent of the P1.06 billion national budget considering that the budget for the agriculture sector is tied up with the Department of Agriculture department’s budget," Mariano said.

Not even with the funds from the Agriculture and Fishery Modernization Act at P15 billion could really give an impact to agriculture development.

At the ideal 20 percent share of the national budget, the budget for the agriculture sector subsidies and development should be at P200 billion.

Thus, it should not be viewed independently of other proposals concerning the rice sector including proposals to re-organize the National Food Authority (NFA) and the proposal to allow farmer’s importation of rice. These proposals are virtually indistinguishable from conditions set by the Asian Development Bank (ADB) which are tied to its $175 million Grains Sector Development Loan Package (GSDLP).

Premature rice tariffication under the proposed bill will undermine our objective to attain long term and sustainable food security, which is based on food self-sufficiency.(BCM)