Impact of minimum access volume on Philippine rice industry.

Date

4-2013

Degree

Bachelor of Science in Agricultural Economics

College

College of Economics and Management (CEM)

Adviser/Committee Chair

Gordoncillo, Prudencio U.

Abstract

The study aimed to analyze the impact of Minimum Access Volume (MAV) on Philippine rice industry. Specifically, the objectives were to (1) describe the trend in rice production in relation to MAV; (2) analyze the fluctuations in the domestic prices of rice in relation to MAV; (3) measure the effects of import quota on welfare of producers and consumers, net economic losses and government revenues; and (4) discuss policy implication and make recommendations. The study made use of the following analytical techniques: (1) partial equilibrium analysis to measure welfare and efficiency effects; (2) and piecewise regression model to determine the impact on volume of imports, domestic production and domestic price. Government revenues were generally higher during the MAV era than that of the non-MAV era. Consumers, however, were vulnerable to the imposition of the 50 percent tariff since there were greater welfare losses to them. Producers, on the other hand, had welfare gains due to MAV. However, net economic losses were contributed by economic losses in consumption and production brought about by MAV. Consumers transferred part of their consumer surplus to the government budget as the government was able to generate revenue for imports. Results on piecewise regression estimates showed that the volume of rice imports had been increasing since MAV operation. Despite the imposition of 50 percent tariff, the country was still importing high volumes of rice. Growing demand caused by exponential increase in population, limited land area, and adverse weather conditions were the reasons for large imports of rice. Also, the results of regression analysis showed that the domestic rice production was increasing. Results of the regression analysis on the domestic price of rice showed that tariff rates significantly affect the domestic price. From 1985-2010, the domestic price had been increasing. The findings indicated that Minimum Access Volume significantly affected the Philippine rice farmers, government revenues, rice import volume, domestic rice production and domestic price of rice. The study recommended the extension of MAV and must be effective in collecting tariff. To address the problem of high levels of rice import, enhancing measures must be put in place. Structural deficiencies must also be addressed in order to maximize production. Moreover, the study recommended that the government must be in full responsibility of controlling prices and imports of rice.

Language

English

Location

UPLB College of Economics and Management

Call Number

Thesis

Document Type

Thesis

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