The Department of Agriculture (DA) has urged farmer cooperatives to import fertilizers directly from international producers and suppliers in order to reduce the farm input's local cost.

Agriculture Secretary William Dar said the move would also provide the farmers’ cooperatives and associations (FCAs) additional revenue from agribusiness enterprises.

“The idea is to allow capable FCAs to import their fertilizer requirements, and sell the surplus to fellow farmers in their respective areas,” Dar said.

“This is a win-win proposition for farmers because they could negotiate for lower-priced fertilizers, and engage in trading that could give their respective FCAs additional source of revenue,” the DA chief added.

Director Wilfredo Roldan, of the DA's Fertilizer and Pesticide Authority (FPA), said although fertilizer importation was liberalized in 1986 and maintained VAT exemption to cushion the price increase, "very few FCAs have availed of said privilege."

Dar said that FCAs are granted tax-free importation of farm inputs, including fertilizers, under Section 108 to 110 of the Republic Act 8435 or the Agricultural and Fisheries Modernization Act of 1997.

"By doing so, the FCAs would get first-hand experience in fertilizer importation and trading, and learn the logistical requirements. The DA through the FPA will assist interested FCAs engage in this agribusiness venture -- from registration, warehousing, to logistics and marketing,” Dar said.

“If FCAs are involved in fertilizer trading, they would know if commercial traders are overpricing fertilizers, at farmers' expense," he added.

However, prior to allowing FCAs to import and trade fertilizers, they must first apply for product registration and license to operate with the FPA, an attached agency of the DA tasked to regulate the trade and use of fertilizers and pesticides in the Philippines.

For traditional product registration, interested FCAs must secure a certificate to import samples of the product for analysis. After passing the confirmatory analysis conducted by FPA, the company then proceeds with product registration.

FCAs eligible to apply for an importer license will also have to apply for importer, national distributor, and warehouse registration. The warehouse will also be subject for inspection by respective DA-FPA regional offices.

After securing these requirements, the registered FCA may then import the products and even avail of duty-free benefits by applying for VAT exemption certificate, that also serves as the import clearance at the Bureau of Customs (BOC).

The Philippines is a net importer of fertilizers, at 95 percent, and thus is highly dependent on international market conditions, said Roldan. The country requires an average of 2.6 million tons (MT) of various fertilizer grades yearly.