By MADELAINE B. MIRAFLOR
Since taking over the Department of Agriculture (DA), there’s already been a lot on the plate of Agriculture Secretary William Dar, and yes it is all food.
The worst months for the agriculture sector in 2019 happened in the second half and they happened as Dar took over the DA and replaced former Agriculture secretary Emmanuel Piñol, who resigned amid an apparent rift with the country’s economic managers.
It was when the fatal animal disease African Swine Fever (ASF) hit the country, prices of palay continuously going down, sugar farmers and barons getting livid over the proposal on liberalization, and typhoon Tisoy wiping out billions of farm output in many provinces at the last minute.
During the third quarter of the year, the Philippine agriculture, albeit producing more, has earned less as the influx of imported rice in the local market and rising cases of ASF in the hog industry pulled down the prices of palay and pigs, respectively.
To be specific, from July to September, the country’s agricultural production grew by 2.87 percent in the third quarter of 2019 on the back of higher output recorded in crops, livestock, poultry and fisheries, but its total value at current prices amounted only to ₱395.3 billion, which is 3.64 percent lower than the previous year’s record, a data from the Philippine Statistics Authority (PSA) showed.
For the rest of this year, Dar is hopeful the sector could still pull off a growth of 2 percent.
“My outlook remains positive. Of course, not all your targets can be met and a lot of unexpected things happened like ASF for example,” Dar said in a previous interview.
Dar, when he was appointed back in August, said that he aims to bring the agriculture sector’s growth performance by 4 percent at least before the term of President Rodrigo Duterte ends.
World’s top rice importer
From completely running out of cheaper, imported rice sometime in 2018, the Philippines has emerged as the world’s top rice importer in 2019, beating one of the most populated country globally, China.
In a US Department of Agriculture (USDA) report, it looked like the Philippines is on track to import 3 million metric tons (MT) this year, while China is expected to slow down on its import and may only buy 2.5 million MT as it continuous to boost its local rice production.
Though the Philippine government won’t necessarily blame the Rice Tariffication Act or RA 11203 for it, Dar did say at one point that the law, which was passed in March and allowed unlimited rice importation in the country, indeed resulted to excessive amount of imported rice in the country, causing for the price of locally produced palay to keep on going down to the detriment of Filipino farmers.
There is now a move at the DA to restrict the issuance of sanitary and phytosanitary import clearances (SPS-IC) to rice traders to control importation.
This, as it nixed its earlier plan to impose safeguard duties on rice imports, a plan supported by a lot of farmers groups.
In order to import rice, RA 11203 only requires local traders to obtain an SPS-IC from the Department of Agriculture (DA). An SPS certifies that rice imports that will enter the country are free from pests and diseases.
It was also specified in the law that in order to protect the Philippine rice industry from sudden or extreme price fluctuations due to the influx of imported rice, a special safeguard duty on rice could be imposed in accordance with Safeguard Measures Act.
“The plan to raise the tariffs on rice imports is not their choice. It’s in the law. It’s a must. The Section 10 of RA 11203 is not their prerogative. They have to impose it. That’s not their choice,” Philippine Chamber of Agriculture and Food Inc. (PCAFI) President Danilo Fausto also said.
Raul Montemayor, National Manager of the Federation of Free Farmers (FFF), also said that SPS regulations are “not designed or intended as a trade barrier, or a tool to control imports, although it may have that effect.”
He then maintained that the best way to control the surge in rice imports is through the implementation of general safeguard duties, which means imposing higher tariff on rice imports.
Fausto and Montemayor are just some of the people and groups that are furious about how the government is handling the negative impact of RA 11203 to Filipino farmers, who already lost more than ₱60 billion due to flood of rice imports.
Nevertheless, Dar, together with the the Department of Finance (DOF) and the Department of Trade and Industry (DTI), has appealed for the public to give the law a chance.
According to them, the current situation of the rice industry is just “short-term transition challenges.”
Meanwhile, even in a liberalized regime where the National Food Authority’s (NFA) role was supposedly reduced to buffer stocking for calamities and emergencies, the state-run agency said it still continues to sell rice at ₱27 per kilogram (/kg).
This, since RA 11203 was not yet able to bring down the cost of retail rice at that level.
Based on the government’s earlier computation, the market prices of rice should go down by ₱7/kg once rice tariffication happens. Instead, it’s the price of palay that went down to that level, hurting farmers so badly.
Lowest rice output
While the country’s rice imports is hitting all time high, local palay production for 2019 was seen to end at its lowest output since 2016 at 18.49 million MT.
From 2015 to 2018, palay production in the country was highest in 2017 at 19.28 million MT and lowest in 2016 at 17.63 million MT, a data from Philippine Statistics Authority (PSA) showed.
In 2018, palay production settled at 19.07 million MT.
Explaining the country’s need to continue importing rice, Dar said “we are short of 15 percent by the end of this year. We can only produce 85 percent of our rice requirements this year”.
Not learning lessons
The issue on the influx of imported rice has not been fully resolved yet, but the government is already targeting to liberalize another commodity – sugar.
Citing the impact of RA 11203 to rice farmers, Senate Majority Leader Juan Miguel F. Zubiri is now leading the call to oppose the liberalization of sugar trade.
“We’ve seen the impact of the Rice Tariffication Law. There is no denying this it has affected our farmers. And so, they are trying to figure out what to do now and they are still adjusting. We don’t want this to happen to the sugar industry,” Zubiri said.
Sometime in November, some senators, including Zubiri, released a resolution urging President Rodrigo Duterte and other members of the Executive Branch not to pursue the planned liberalization of the sugar industry “with the end in view of safeguarding the welfare of sugar farmers and industry workers in more than 20 provinces in the country”.
The resolution identified the country’s economic managers, which is led by Finance Secretary Carlos Dominguez III, as the main advocate of the plan to allow the unimpeded entry of cheaper imported sugar into the Philippines.
“Economic managers blame the proposed liberalization of sugar imports on the costly price of local sugar against those in the world market and that the same affects the competitiveness of sugar-containing food products for exports,” the senate resolution reads.
The senators believe, however, that the proposed liberalization of the sugar industry will “contradict the President’s thrust towards food security and will adversely affect the entire agriculture sector”.
“We urge the economic managers to conduct proper consultation before announcing such plans,” Zubiri said.
In the resolution, the senators stressed that the deregulated entry of subsidized sugar into the Philippine market will be disastrous to the local sugar industry, which currently contributes an estimated ₱96 billion to the Philippines’ gross domestic product (GDP).
The impact, they said, will be felt by 84,000 farmers, most of which are small farmers and agrarian reform beneficiaries, as well as the 720,000 industry workers.
In one of its previous economic bulletins, the DOF suggested that the liberalization of sugar industry could bring down the retail cost of sugar in the local market.
The agency stressed that the high effective protection rate (EPR) of the Philippine sugar industry has been penalizing consumers and has deterred the growth of downstream industries.
Until now, the DA and the SRA have not really condemned DOF’s proposal.
It is for this reason that Zubiri called out Dar and SRA Administrator Hermenegildo Serafica for their “deafening silence.
One of DA and the ₱260-billion local hog industry’s worst fear happened when Dar was just less than a month into office.
ASF, a fatal animal disease affecting pigs and wild boars with up to 100 percent case fatality rate, managed to creep into the country’s backyard farms.
The virus was first detected in August in Rizal province and had since then spread to other areas in Luzon, including Bulacan, Pampanga, Quezon City, Cavite, Nueva Ecija, Cavite, Pangasinan, Malabon, Caloocan, and Antipolo.
In a notification to the World Organization for Animal Health (OIE), Philippines’ Chief Veterinary Officer and Bureau of Animal Industry (BAI) Director Ronnie Domingo said that more than 40,000 hogs in the Philippines are now at the risk of contracting ASF too.
ASF, which can’t infect humans and is not considered as a food safety risk, also resulted in a dispute between the country’s hog producers and meat processors.
Right now, Dar said the occurrence of ASF in the country has already been going down, especially with a National Zoning Plan in placed.
Last minute damage
Just when things couldn’t get any worse for the farm sector, typhoon Tisoy hit the country and it hit it real hard.
The total damage? It stands at nearly ₱4 billion, a data from the DA’s Disaster Risk Reduction and Management Council (DRRM) showed.
Considered as the strongest typhoon to hit the Philippines for this year, Tisoy wiped out as much as 195,046 metric tons (MT) of farm output, including rice, corn, high value crops, livestock, and fisheries.
It also left 132,166 hectares of farm land destroyed and 92,701 farmers and fisherfolks affected.
The affected areas include Central Luzon, CALABARZON, MIMAROPA, Bicol Region, Western Visayas, Ilocos Region and Eastern Visayas.
As part of its interventions, the DA released ₱250 million from its Quick Response Fund (QRF).
Despite all these things, Dar, fresh from Commission on Appointments (CA) confirmation, is hopeful that he can bring growth to the farm sector.
“Agriculture sector is about hope and the growing sense of optimism about the growth. This leadership is only more than four months in office, but even with the short period, the period has been truly eventful and challenging,” Dar said.