Assessing the impact of rice trade liberalization in the Philippines: the case of Oriental Mindoro
2002
Tiongco, M.M. | Castillo, A. | Dawe, D. (International Rice Research Inst., DAPO Box 7777, Metro Manila (Philippines). Social Sciences Div.)
The ratification of GATT-UM (WTO) Agreement in 1995 promised to set a decisive path towards trade liberalization by replacing all quantitative trade restrictions with tariffs, imposing a ceiling on tariff rates, and reducing tariff protection over time. But the rice sector, one of the heavily regulated commodities, has been exempted from tariffication until 2004. There are two potential effects of trade liberalization on the rice economy of the Philippines. First is the effect on the average level of domestic rice prices. Second is on the variability of domestic rice prices. If rice prices fall, farmers may suffer large losses of income while consumers such as rural landless, on the other hand, will benefit from the lower rice prices. To assess the impact of trade liberalization, the authors conducted a survey in selected municipalities in Oriental Mindoro and collected information on costs of rice production, on whether costs are self-financed or borrowed, and on the profitability of alternative crops. It is also important to quantitatively understand the effect of such policy on the income of landless laborers who derive income from working on rice farms and also determine if there are other job opportunities for them outside of rice farming. This paper also conducted survey with the rice traders and millers to estimate the marketing margins from farm to wholesale markets, their marketing costs, profitability and investment
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