PCCI asks govt to cut tariff on rice imports
THE government should reduce the tariff on rice imports to 5 percent to make the food staple cheaper and to discourage smuggling, an official of the Philippine Chamber of Commerce and Industry (PCCI) said on Wednesday.
PCCI Honorary Chairman and COO Donald Dee said the government should consider this after the quantitative restriction (QR) on rice traded under the World Trade Organization expires in 2017.
“Taking out the QR does not really open the market. What will open the market is [removing] tariff. But if you [impose a] 40-percent tariff on rice, you’re going to encourage smuggling,” Dee said at the sidelines of the Pandesal Forum held in Quezon City.
Minimal Government Thinkers Inc. President and economist Bienvenido Oplas agreed, saying that only the 12 percent value-added tax (VAT) should be imposed on rice imports to cut prices. At this rate, Oplas said, rice prices could go down to around P28 per kilogram, inclusive of freight cost and VAT. This is lower than the current price of NFA rice pegged at P30 per kg.
“Sabihin mo na wholesale price in Cambodia is P10, hindi ’yan P10 dito. Baka pagdating niyan P13 na. And then there is VAT,” Oplas said.
Before this could be done, Dee and Oplas said the government should focus on increasing farmers’ productivity and help them cut production cost.
One way of increasing farmers’ productivity, Dee said, is to improve their access to financing so they can buy high-yielding seeds and modern farm equipment.
Currently, Dee said, many farmers rely on loan sharks who charge onerous interest rates.
“Basta mataas productivity [ng farmers], 10 times ang balik niyan. Kung ang cost mo ay P5, ang laki ng kita,” Oplas said.
Earlier, the National Economic and Development Authority (Neda) pushed for the removal of the QR on rice to bring down the price of the staple.
Economic Planning Secretary Arsenio M. Balisacan said making rice cheaper would help temper inflation, which picked up in the first half of 2014 due to higher food prices. The increase in food prices was cited by the government as a significant factor behind the rise in the country’s poverty incidence.
“While we definitely need to support the agriculture sector in general, we should also maximize the gains from trade and globalization,” said Balisacan, who is also director general of the Neda.
“The private sector should be allowed to take the driver’s seat, while the government simply facilitates the access to both the import and export markets,” he added.
The Neda noted that rice is a staple food for low-income and vulnerable families, usually
accounting for 20 percent of their budget.
Source: www.businessmirror.com.ph
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