Thailand will make a final proposal to the Philippines that it import at least 360,000 tonnes of rice annually from Thailand tariff-free.

If this offer is rejected, the Kingdom may not sign off on Asean Free Trade Agreement (Afta) liberalisation of the rice trade next year.

The proposal will be submitted to the Philippines government during the Asean leaders' summit late this month.

Manila does not have to implement zero import tariffs on rice under Afta but has offered Thailand an annual rice-import quota of 50,000 tonnes at zero tariff.

Commerce Minister Porntiva Nakasai said her ministry would hold bilateral talks with the Philippine government at the summit and call on it to raise the quota.

"Manila's delay in implementing the zero tariff will cause difficulties for Thai rice exports. The Philippines imposes a high import duty of 40 per cent on rice, because it classifies it as a 'highly sensitive product'. It plans to reduce the tariff to 35 per cent by 2015, but that's still too high," Porntiva said.

To ensure fairness, the Philippines must import 360,000 tonnes of rice from Thailand tariff-free each year. That amount is based on the Kingdom's rice exports to the Philippines over the past three years.

Porntiva said the ministry would discuss the problem with the Cabinet soon, because Thailand could not accept the Philippines' offer of such a small tariff-free quota for Thai rice.

The ministry said if the Philippines did not treat Thai rice fairly, the Kingdom might not ratify the Asean Trade in Goods Agreement (Atiga) under Afta at this month's summit, which would cause a delay in Thailand's trade liberalisation.

Only three member countries - Thailand, Indonesia and Laos - have not yet ratified Atiga, which would liberalise trade in goods next year.

Afta requires import duties on rice among members - except Malaysia, the Philippines and Indonesia - to be eliminated by next January 1. Rice is now subject to a 5-per-cent import duty among most Asean members.

The Philippines, which classifies rice as a "highly sensitive good", has committed to reducing its import duty from 40 per cent to 35 per cent by 2015. Malaysia will reduce its import tariff to 20 per cent next year. And Indonesia will cut its tariff for rice to 25 per cent and for sugar from 30-40 per cent to 5-10 per cent by 2015.

In addition, the Rice Policy Committee next week will announce its reference price for rice will be reduced by 4-5.2 per cent for this month. The new reference will lower jasmine paddy rice to Bt14,940 a tonne and white rice to Bt8,466 a tonne.

Meanwhile, Prime Minister Abhisit Vejjajiva yesterday responded to members of Parliament regarding the rice-guarantee policy. He said if the government's guarantee was insufficient to serve production, then the Commerce Ministry would launch further price-intervention measures to prevent a plunge.

Abhisit said he had been informed the government's practice on crop guarantees continued to have many problems. However, paddy rice price should be quoted at Bt7,000 a tonne.

In addition, the government will consider relaxing conditions under the price-guarantee scheme, particularly the moisture content of rice. Farmers who could not register in time for the programme will be included.

Source: The Nation