Wednesday, 9 April 2008

Gov’t opens lower tariff rice imports

Private traders allowed to use NFA as a conduit
ADBR
BusinessWorld Online
http://www.bworldonline.com/BW040908/content.php?id=002

THE GOVERNMENT has allowed the private sector to use the National Food Authority (NFA) as a conduit for rice imports, sparing them from the need to pay a 50% tariff.

Agriculture Secretary Arthur C. Yap told Palace reporters that the Cabinet had agreed to a temporarily [sic] system where the NFA would import rice for the private sector.

"The private sector can import by using the tax expenditure subsidy of the NFA. Then they will be charged a fee for the importation. So basically, when you look at that formula, you are reducing the cost of the tariff to around 10%," he said.

Under the previous set-up, a private company wanting to import rice would have to pay a tariff of 50%, compared to the NFA rate of 10%.

Mr. Yap said the private sector would have to apply to the NFA, which will then issue a license to import. The NFA would then take orders and the applicants would have to pay around P2-3 per ton in service fees.

"[The set-up] is going to make [importation] more meaningful," Mr. Yap said.

"People say we are allowing imports and yet at a tariff rate of 50%, how can we import? The system gives us flexibility since if we decide to move the tariff rates [via normal procedures], we have to go through consultations with farmers and the proceedings provided by the Tariff and Customs Code."

The Agriculture chief said the appropriate agencies were still fixing the maximum amounts that could be imported, and that economic managers would determine up to when the mechanism would be implemented.

"We cannot allow big players to take too much volume. We cannot just invite parties to import as much as they want. We spread as much as possible the import activity," Mr. Yap said.

Deputy Presidential Spokesman Anthony T. Golez said the set-up would increase domestic rice supply and stabilize prices. He added that once the prices stabilize, hoarders would be forced to sell.

President Gloria Macapagal-Arroyo, meanwhile, told the Cabinet that the country would have enough of the staple.

"We can report that our supply is secure for the foreseeable future ... It is essential for the people of the nation understand what the situation exactly is and what we are doing about it," she said.

"It would be unfortunate if panic overtook logic, for we will endure and survive this moment and come through it stronger."

Mrs. Arroyo said 500,000 metric tons (MT) from Vietnam and Thailand had arrived and that 700,000 MT from Vietnam, Thailand, and Pakistan would be shipped from this month until June.

She said the government was moving to secure supply, ensure proper distribution, and guarantee enforcement of laws.

The President also urged Congress to fast-track the passage of a Consumer Rights Bill. — ADBR

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