RP seeks rice deal with Thailand; US rejects higher sugar quota

THE government has placed an order of 200,000 metric tons of rice from Thailand on condition that Bangkok would agree to the Philippine position for a slower tariff reduction on the commodity, Manila said yesterday.

The transaction would be government-to-government, Agriculture Secretary Arthur Yap said, with the possibility of raising the volume but with the Philippines shouldering the tariff burden on additional imports of rice from Thailand.

“But to what level, we’ll see. It’s up to Thailand’s position,” he said, adding that the first transaction may carry the existing 40-percent tariff rate, and that the government offered to buy 50,000 MT more under the tax expenditure subsidy scheme.

The subsidy comes from a Finance Department policy that holds the Philippine government responsible for the tariffs on import shipments, which means that Thailand will not have to pay tax for its rice export. The Philippines as member of Asean may negotiate a government-to-government transaction under the association’s protocol on sensitive commodities, according to Yap.

“And we are well-within our right to give them an end-rate by 2015 and so the ball is in their court,” he said referring to the lower tariffs under the Asean Trade and Goods Agreement, the improved version of the Asean Free Trade Agreement-Common Effective Preferential Treatment.

The Philippines could not afford to reduce the tariff on rice beyond 35 percent starting next year in order to protect the livelihood of farmers.

As to how much rice the Philippines would import in 2010, the Agriculture Department said the numbers had not yet been made final. “We don’t know. We’ll check first. We want to see the status of the damages first, the possibility of private sector importing and also the status of harvest in the Visayas,” said Yap.

The government will seek on Nov. 4 tenders for the supply of 250,000 MT rice, while maintaining that there is enough inventory of the staple until the first quarter of 2010.

The National Food Authority has estimated that 2.1 million MT of inventory are in government warehouses, households and commercial stocks.

As to sugar, the US has no immediate need to import more of the raw commodity from the Philippines, according to Agriculture Secretary Tom Vilsack.

“We have an overabundance of raw sugar, and a lack of refined sugar because of our refining capacity. So the issue of imports don’t address the issue of refined capacity,” Vilsack said.

While the Philippines will soon ship out the remainder of its allocation under the US tariff-rate quota scheme for fiscal year 2010, the Philippine Sugar Millers Association Inc. is not giving up hope that the US might increase its traditional allocation for the Philippines for 2011.

Of 137,00 MT sugar quota for 2010, 104,000 had been frontloaded and some 33,000 MT would be shipped to the US next month.

But Vilsack said the US would rather export more vegetables that the Philippines was not growing in large commercial quantities. “We are seeking the entry of more lettuce, carrots, broccoli, celery, cauliflower and fresh potatos,” he said.

Meanwhile, the government may lift today the ban on meat and bone meal from the US and other countries, Agriculture Undersecretary Bernie Fondevilla said. –Othel V. Campos, Manila Standard Today