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Buying from rice smugglers

By Val Abelgas | Feb. 14, 2013 at 12:01am
While we want to praise President Aquino and Agriculture Secretary Proceso Alcala for the increased production in rice the past year that, they said, would eventually lead to the Philippines becoming a rice exporter by 2014, we could not help but be alarmed by claims made by Abono chairman Rosendo So that the country faces a rice crisis because of an oversupply of the staple.

After being the world’s largest rice importer to becoming a country that now faces oversupply of rice, shouldn’t So and the farmers be happy that they could become exporters by next year?

Apparently, the farmers have increased their yield the past two years, but are unable to sell their produce at a profitable price because smuggled rice from China and Vietnam have flooded the market. The increased production and rampant smuggling have resulted in oversupply and huge losses for the farmers, and hefty profits for the rice cartels and the rice smugglers.

So, instead of the Filipino farmers benefiting from their increased production, they are left with rice that they are forced to sell at a losing price to at least regain some of their costs. Or maybe the Department of Agriculture plans to solve the rice problem by exporting the rice produced by the farmers and letting the smugglers supply the country’s needs. Good for the farmers, bad for government and the consumers.

For years, the country has been importing rice from rice-producing countries such as China, Vietnam, Cambodia and Thailand to meet the food requirements of the country’s 92-million rice-eating people. There was a time when the Philippines was one of the biggest rice-producing countries in the world but for some reason, the country started lagging behind.

Up to the seventies, the Philippines was ahead of its neighbors in rice production. During those times, students from neighboring countries such as Thailand, Malaysia and Indonesia came to the Philippines to study in the International Rice Research Institute and the University of the Philippine College of Agriculture, both In Los Baños.

Looking back, rice production in the country reached its peak during the time of President Marcos with the building of irrigation dams, farm-to-market roads and other infrastructure, and the government’s full support to farmers.

Rice production fell to the global trend towards industrialization, the market inequities brought about by trade liberalization, the rise of the trade cartels, the loss of agricultural lands to subdivisions and industries, the inconsistencies in climate brought about by the El Nino phenomenon, and the rise of graft and corruption.

The rise of the rice cartels delivered the deathblow because the farmers were forced to sell at very low prices to these monopolies. While the farmers sold their produce at very low prices to these cartels, the latter jacked up rice prices because they controlled the supply. The government tried to intervene by putting up the National Grains Authority, (which later became the National Food Authority) which was mandated by law to buy directly from the farmers to resell to the public at affordable prices.

But corruption soon seeped into the agency, and instead of selling the rice to legitimate vendors, unscrupulous NFA personnel diverted the grains to the rice cartels.

The rice cartels continue to profit from this arrangement, but have become bolder. They now apparently smuggle billions of pesos worth of rice from China and Vietnam and bring them into the country obviously with the help of corrupt Customs officials.

The Abono chairman said the nation is facing a rice crisis not because of shortage of produce but because of oversupply. Smuggled rice has been flooding the market, and millers cannot buy from local farmers because their warehouses are filled to the rafters, he said.

“Where will the farmers go now with the harvest season and no one is buying? The smugglers are killing the industry,” So complained as he urged the President to go after the smugglers.

So lamented that the NFA allotted only P10.9 billion for the procurement of 615,985 metric tons of palay from farmers this year, which, he said, is just three percent of the expected total harvest of 20.4 million metric tons this year.

He said if the government is really serious in helping farmers, they must increase the volume to 30 percent or at least P105 billion worth of palay.

But I don’t think the government is ready to listen to their plight. In fact in September 2011, then NFA chief Lito Banayo even suggested that the country should abandon its goal of achieving self-sufficiency in rice and encouraged farmers instead to plant “high-value” crops such as fruits and vegetables.

Banayo added that the country cannot hope to compete with rice-importing countries such as Cambodia and Vietnam, which have largely flat lands, have rivers crossing through rice lands, and are rarely visited by typhoons.

Obviously, Banayo was content with the Philippines depending on other countries for its rice requirements, which made us wonder why an agency that was supposed to help farmers by buying their produce was suddenly discouraging them from planting rice. It’s a good thing the government did not listen to Banayo because the people would then be completely at the mercy of the rice cartels, aka rice smugglers.

For all the boasts of the Aquino administration that it had curbed corruption in government, it has apparently failed to make a dent in what has always been perceived the most corrupt agencies in the government, including the Bureau of Customs. While we believe that Commissioner Ruffy Biazon is exerting his best efforts to go after unscrupulous men and women in his bureau, obviously his efforts are not enough to eliminate deep-rooted corruption in the agency.

Biazon should go after the rice smugglers and their cohorts in the bureau so that the farmers would be better motivated to help Secretary Alcala attain his goal of increasing the country’s rice output to the point where the Philippines would not only be self-sufficient in rice, but also become an exporter by 2014.


Val Abelgas is a former managing editor of Manila Standard. 
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