THE Department of Agriculture (DA) has suspended the rice import permit process for farm cooperatives and irrigators’ association on suspicion that some of them are serving as dummies for commercial traders.

Agriculture Secretary William D. Dar issued Administrative Order No. 34, which freezes permit issuances, processing and application filing of sanitary and phytosanitary import clearances (SPSICs) to such organizations until further notice.

Mr. Dar also instructed the Bureau of Plant Industry to consult stakeholders and open an investigation in preparation for new rules protecting farmers and their cooperatives from “exploitation.”

The Philippines is dealing with increased rice imports since Republic Act No. 11203 or the Rice Tariffication Law removed import restrictions in 2019.

Mr. Dar said the freeze follows reports that SPSICs for rice imports are being obtained by traders using farm cooperatives and irrigators’ associations as fronts.

The investigation will center on the alleged practice of “taking advantage of the privileges provided by law to the cooperatives to avoid their legal responsibilities and evade taxes,” Mr. Dar said.

Mr. Dar also cited Senate Resolution No. 536 which called for an investigation into alleged abuses of the importing privileges.

He added that many cooperatives and irrigators’ associations have also entered the business of importing rice instead of buying rice from domestic farmers.

“Farmer cooperatives… and irrigators’ associations imported almost half of the volume of imported rice in 2019,” Mr. Dar said.

In a mobile phone message, Samahang Industriya ng Agrikultura Chairman Rosendo O. So said that instead of freezing the import clearances process, Mr. Dar should suspend officials that facilitate the granting of SPSICs to cooperatives.

Mr. So added that the DA should issue a “blanket ban” on the issuance of SPSICs, and not limit the suspension to cooperatives and associations.

“SPSICs should not be issued until next year,” Mr. So said.

Former Agriculture Undersecretary and current Bangko Sentral ng Pilipinas Monetary Board member V. Bruce J. Tolentino said that it is vital to ban imports by groups that are not “true cooperatives.”

“There are enterprises and other businesses that have been organized as cooperatives in order to take advantage of such tax exemptions, and thus abusing the tax privilege,” Mr. Tolentino said in an e-mail interview.

“This is a regulatory task that the Cooperative Development Authority (CDA) has to undertake, in collaboration with the Bureau of Internal Revenue and Department of Finance,” he added. — Revin Mikhael D. Ochave