The suspension of the pesticide residue fees is expected to give Philippine exports of fruits and vegetables a big boost following a substantial decrease in 2020 coming on the steady decline in country’s overall exports in this sector over the last 10 years.
Business groups Philippine Exporters Confederation, Inc. (PhilExport), Philippine Chamber of Commerce and Industry (PCCI), and the Philippine Food Processors and Exporters Organization, Inc. (PHILFOODEX) lauded the Department of Agriculture for acting on their appeal to suspend PRA fees, saying the move demonstrates the strong commitment of Secretary William Dar to protect the interest of farmers and exporters and to enhance the competitiveness of the agri-food and export industry.
DA Order 11 series of 2021 exempts from Pesticide Residue Analysis (PRA) fees fresh and primary processed (frozen, dried, pureed) fruits (including mango, banana, durian, pineapple) and vegetables (such as okra, edamame, among others), that are intended for export by accredited exporters and farmers.
Exporters of fresh and processed fruits and vegetables can now avail of free pesticide residue test following an order by the Department of Agriculture directing the Bureau of Plant Industry and its satellite laboratories to stop collecting fees in a bid to strengthen the country’s agricultural export.
Since 2007, the National Pesticide and Analytical Laboratory (NPAL) has not been imposing PRA fees for fresh and frozen mango exports in compliance with Executive Order 554 of 2006 issued by then President GMA and DAO 7 of 2007. However, in 2019, with the exception of fresh mangoes, NPAL, arbitrarily started imposing residue fees on frozen mangoes amounting to P5,200 for each lot sample. Since more than 60% of farmers of fresh fruits and vegetables nationwide are into backyard operations, the amount multiplies tremendously as the costs are assessed based on the submitted lot size sample.
Based on statistics, Philippines exports of fruits and vegetables continue to shrink over the last 10 years. The Philippines used to be the third largest exporter of fresh bananas globally until 2015 and top exporter of fresh mangoes to Japan, accounting for more than 60 percent of imports from 2005 to 2009 with an average of 3,500- 5,000 MT per annum. However, due to chemical residue issues, exports dropped to 5.7 MT in 2020 from 2,600 MT in 2009. The Japan fresh mango market is now dominated by Thailand and Mexico. On the other hand, Philippine mango exports to Korea are also down to 1,032MT in 2020 from 4,781MT in 2014.
For frozen mango products (IQF and Puree), the country has also been experiencing a downtrend in the EU, Japan and Korea markets, registering only a total export of 758.15MT in 2019 from 37,277MT in 2009. For fresh asparagus, Philippines used to dominate the markets of Japan and Korea from 2008 - 2015 with an average export of about 455 MT per annum, and now down to just less than 2.5 MT.
PCCI President Benedicto V. Yujuico said that the suspension of payment will significantly impact the agriculture stakeholders where approximately around 150,000 farmers/growers nationwide, including more than 1,000 small- and medium-sized processors and exporters engaged in production and processing will benefit.
“We commend the leadership of Secretary Dar for responding to our call to remove the PRA fees. This is certainly a big boost to the agri-food and export industry especially at this time when businesses have yet to recover from the negative impact of COVID-19 pandemic,” Yujuico said.
PHILEXPORT President Sergio R. Ortiz-Luis Jr. also expressed appreciation of the DA’s order, saying the decision is a huge reprieve for food exporters especially at this time when businesses have yet to recover due to the pandemic. Moving forward, “we hope that the BPI will implement measures that would help achieve our export targets by enhancing the competitiveness of the agri-food sector to open and expand global market access and niches”, he added.
PHILFOODEX President Roberto C. Amores likewise welcomed this development, even as he underscored the need for the DA to look into other technical measures that serve as barriers to trade that burden agri-food exporters.
He said that developed countries like Japan, European Union, USA, South Korea and China and all other major markets have imposed stringent traceability standards or the Maximum Residue Limit on pesticide to protect their people and consumers, which has become a technical barrier that impedes our export performance.