The proposed system by the government for allocating up to 80% rice import quota to a preferred candidate is discriminatory, unfair and anti-competitive, the country’s think-tank, National Research Institute report has revealed.
The report stated that a competitive market is good for an efficient outcome and allocation of economic resources but the proposed import quota allocation system will frustrate competition and create an inefficient rice market in the country.
“By promoting anti-competitive trade practices through the proposed unfair import quota policy/system, the Government will be violating the World Trade Organization trading rules,” the report highlighted.
The report also cautions that emergence of a monopoly trader in the rice industry is a dangerous prospect, especially with rice fast becoming a staple food throughout the country – the cost of survival for many household will increase.
The report further highlighted the need for an optimum method to allocate quotas for importing rice and recommended for import quota arrangements that are transparent and disclosed in a publicly available policy document.
“To avoid conflict of interest, import quota allocations should be made to trading companies; no allocation of quota should be made to domestic rice producers.”
This Spotlight paper further recommends that the Government must adopt policies on rice production, an import quota allocation system, and marketing that are not discriminatory, unfair or anti-competitive so market power and profits are not concentrated in the hands of favoured players.