THE GOVERNMENT is matching the rising importation of rice with stricter implementation of existing rules for sanitary permits.
The Department of Agriculture issued on Nov. 12 Memorandum Order No. 28 on “Supplementary provisions to DA Department Circular No. 4, series of 2016, entitled ‘Guidelines on the importation of plants, planting materials and plant products for commercial purposes’.”
Citing, among others, the “need to strengthen registration procedure for importers of plants, planting materials and plant products, and specify the validity of the sanitary and phytosanitary import clearance (SPSIC) to safeguard from entry, establishment and spread of exotic plant pests and comply with food safety requirements,” the order implements “revised requirements” in this regard.
Besides listing a host of required documents, the order also implements a section of Republic Act No. 11203 — which this year liberalized rice importation — that said “[t]he imported rice should arrive before the expiration of the SPSIC…”.
“The actual product/consignment must be shipped from the country of origin within the prescribed date in the approved SPSIC and must arrive not later than 60 days from the must-ship-out date,” read the order which was signed by Agriculture Secretary William D. Dar.
“I signed it yesterday, so (for) implementation na ’yun,” Mr. Dar told reporters on the sidelines of the 11th World Rice Conference at the Makati Shangri-La hotel on Wednesday.
Mr. Dar had said in an Oct. 29 news briefing: “We are issuing a stricter set of guidelines but we have to mention that all along all these [requirements] are there, but just to remind ourselves that we have this and we need to reiterate this.”
“That has been our strategy, much more [as] we were entering the main harvest — October, November — and we implemented strictly the guidelines before any SPSIC is issued.”
SPSIC is issued by the deparment’s Bureau of Plant Industry (BPI). BPI data showed the agency granted 3,115 permits to 228 importers of 2.776 million metric tons (MMT) of milled rice from March to August. This level is more than the country’s 1.5-2.4 MMT estimated import requirement.
According to the Bureau of Customs (BoC), volume of imported rice totaled some 2.9 MMT in the 10 months to October. Of this, 1.87 million MT were imported between March and October after RA 11203 took effect.
The US Department of Agriculture projects that the Philippines will import up to 3 MMT this year, more than China’s 2.5 MMT and making it the world’s top rice importer.
“I have always mentioned my position: give the law a chance to be implemented properly, so after some time — if there will be some little adjustments to make it much more effective — then that is the period when we shall revisit,” the Agriculture chief told reporters.
Also at the sidelines of the rice conference on Wednesday, Trade and Industry Secretary Ramon M. Lopez said its Fair Trade Enforcement Bureau (FTEB) is investigating the rice import-to-retail chain in an effort to ensure reasonable prices.
The Philippine Competition Commission last month said that it is investigating whether middlemen, through anti-competitive behavior, are widening the price gap between what traders pay at farm gate and what consumers pay at retail.
“FTEB kumukuha ng mga data ngayon (collecting data right now), going around sa mga importers so that they can trace their importation and their pass-on price,” Mr. Lopez said.
“Ang gusto lang namin (what we want) is to see cheaper rice in the market.”
Mr. Lopez said that the target range is P33-P36 per kilogram (kg) at retail for imported well-milled rice. He said the margin between trader and market price should typically be at 5-10%.
He expects the investigation to be concluded in three weeks.
The Trade department’s Philippine International Trading Corporation (PITC) will also pilot direct rice importation for fast food chains and grocery stores. “I’m sure [the companies] are sourcing locally as well, but they are now also — instead of buying from traders, they can buy directly,” Mr. Lopez said.
Mr. Lopez said the trial-run includes importing one shipping container of rice, and estimated imports of 300 hundred containers a month once the program is in effect in two to three months.
He said PITC will not profit from the program, and will charge a management fee below the cost of paying rice traders.
According to the Philippine Statistics Authority, the average wholesale price of well-milled rice fell 0.2% to P37.76 kg week-on-week on the third week of October. The average retail price fell 0.1% to P41.87.
The average wholesale price of regular-milled rice was stable at P33.70 per kg, while average retail prices fell 0.3% to P37.11.
Finance Secretary Carlos G. Dominguez III said in his speech at the same conference that the government will not back down from its decision to open up rice importation despite the rice tariffication law’s “transition challenges” that have been hitting farmers hard.
“There is no inclination to repeal, revise or suspend the rice tariffication law,” he said.
Mr. Dominguez noted that the government has collected P11.4 billion worth of tariffs under the program which will be used to aid farmers affected. “This means we have gone beyond the minimum earmark of P10 billion and have ample means to do even more to make our agricultural production more efficient,” he said, referring to the Rice Competitiveness Enhancement Fund.
The law had replaced quantitative import restrictions with tariffs of 35% on rice from within Southeast Asia and 40% for grain from elsewhere.
“According to official data provided by the Philippine Statistics Authority, from an average of P17.23 per kilo of dry paddy from 2015 to 2017, when prices were normal, prices declined to an average of P15.71 pesos per kilo from the third week of September to the second week of October of this year. This translates to an average loss for farmers of about 1.52 pesos per kilo,” Mr. Dominguez said.
Even as he said that the law’s birth pains should be “temporary”, Mr. Dominguez said the farm department is moving to cushion its impact on farmers, including through a program disbursing P15,000 interest-free loans to farmers, payable in up to eight years.
He also said that authorities have stepped up measures against smugglers and hoarders, noting that the Bureau of Internal Revenue has uncovered unregistered warehouses in Bulacan with more than 250,000 sacks of rice imported from Vietnam and Myanmar.
“We will never return to the old regime of unstable rice supplies, high retail prices, profiteering, and low productivity. We should let the rice tariffication law do its work and give the economy time to adjust for further easing of rice prices for all Filipinos and for support programs to lower production costs of our farmers,” Mr. Dominguez said.
In the same conference, Socioeconomic Planning Undersecretary Rosemari G. Edillon cited the need to step up mechanization of the sector in order to boost productivity.
The agriculture sector accounts for about a fourth of the country’s jobs but contributes only a tenth to overall production.
“The adoption of high-yield seed technology is low and about half of the farms are not yet mechanized,” she said.
She said that the country’s quantitative import restriction for around 23 years was meant to protect the domestic rice industry and enable it to develop.
“Unfortunately, while the protectionist policy and the programs associated with it did benefited some local farmers, it has failed to increase production and has made the Philippine rice industry uncompetitive,” she said.
She also said that people are becoming less attracted to work in agriculture, making employment drop to 10.26 million in 2017 from 11.84 million in 2013.
“Our own study points to several demand-and-supply push-pull factors. Among the demand push factors are the low and unstable far incomes due to volatility in geoclimatic conditions, lack of access to post harvest facilities and diminishing farm size. The pull from the non-agricultural sector has also increased agricultural wages, making it unaffordable to small landowners,” Ms. Edillon said.
She also noted that “[f]armgate prices of palay have gone down faster than the decline in retail prices.”
“The influx of imported rice was definitely a factor in this, but so is the lack of access to efficient and affordable drying facilities,” she explained.
“At the same time, there could be unscrupulous traders who are taking advantage of the situations and bidding down farmgate prices unreasonably.” — Vincent Mariel P. Galang, Jenina P. Ibañez, Luz Wendy T. Noble and Beatrice M. Laforga