Rice: A Matter of National Security in Panama

Rice and politics go for a ride
Rice and politics go for a ride
Jun 11, 2018
PANAMA CITY, PANAMA – Rice trade with Panama has been on a roller coaster ride since the beginning of this year as the country’s political agenda is spilling over into the marketplace.

Last February, Panama’s President Juan Carlos Varela approved Law 17, declaring rice as a food security crop and allowing the Executive Branch to establish policies to assure production, availability, and access to a quality product for the consumer while guaranteeing stable markets and equal prices for local rice producers.

With primary elections later this year and a general election in May 2019, legislators are being more responsive to their constituency and Law 17 was in response to protests from domestic rice producers over rice imports.

An element of Law 17 stipulates a fee of fifty cents for each quintal (100 pound bag) of rice to safeguard against future shortages, but only applies to imported rice.  This contribution will be used by domestic rice organizations for training and the payment of the Latin American Reserve Fund.

Then in March, the Government of Panama issued Cabinet Decree No. 15 of 2018, authorizing the import of 1 million quintals (45,351) tons of rice, using the ordinary World Trade Organization (WTO) Tariff Rate Quotas (TRQ) to supply the domestic consumption demand.  The decree mandates 700,000 quintales be distributed to the rice industry and 300,000 quintales be distributed to the Institute of Agricultural Marketing by June 30, 2018.  A three percent customs duty will be charged to this additional paddy rice import.  

“The volatility in this rice market is an indicator that U.S. rice can be competitive, providing a reliable, quality product,” said USA Rice Chairman Brian King who also chairs the USA Rice Western Hemisphere Trade Promotion Subcommittee.  “As the Panamanian market becomes more accessible to other rice exporters, we will reinforce our relationships within the industry and work with our team on the ground to emphasize the quality and versatility of our product for the consumers.”   

Historically, the United States has supplied the WTO TRQ of rice to Panama.  U.S. exports to Panama have been 11 percent higher in the first quarter of 2018 (18,000 MT valued at $8 million) compared with the same time period last year.