Car imports/rice exports

Here are a couple of interesting business issues I gathered in the past week which I wish to share with you.

One is the 4th Thought Leadership Forum that the Association of Vehicle Importers & Distributors (AVID) held recently at the AIM Conference Center.  The speakers in the said forum, a brainchild of its president Ms. Fe Perez-Agudo who sits at the helm of Hyundai Asia Resources Inc. (HARI), spoke of the urgency of having a competitive Philippine automotive industry NOW before the ASEAN Free Trade Agreement catches us flatfooted again.

The two top officers of AVID, Albert Arcilla who is also President of The Covenant Car Co. Inc. (Chevrolet Philippines) and Viking Cars (Volvo Philippines), and Fe Agudo urge tndustry players to be competitive as the Philippines would have a much larger field to move around in with the forthcoming trade liberalization agreement between the 10-member ASEAN block. The shared responsibility of the private and public sectors is to encourage business sustainability, which is why Ms. Agudo urged the government to re-think the industry roadmap.

Dr. Cielito H. Habito, one of the country’s most eminent economists (Bachelor of Science in Agricultural Economics, Summa Cum Laude, University of the Phil., Master of Arts In Eco, PhD, Harvard University, Master of Economics, University of New England in Australia) spoke about the role of the USAID Trade-Related Assistance for Development Project and how this could be pivotal in the forthcoming ASEAN economic integration.

Dr. Federico Macaranas, another Economics graduate of the University of the Philippines and a holder of a doctorate degree in Economics from Purdue University and now a full professor at the Asian Institute of Management, spoke of how, 15 years ago, he cited in a speech that China would be the No. 1 car producer in the world.  That was met with a lot of skepticism back then as China was over-populated with very little resources to feed its people.

Well, it’s happening now — China has leap-frogged over other developed nations in terms of manufacturing and technology, while another backward and over-populated country back then, India, is now a major player in the automotive industry.  The eminent economist stressed how important it is to invest in parts and components technology lest the Philippines be left out.  He mentioned, and I agree, that we must not always insist on local content if this does not represent the best and most efficient. 

Dr. Macaranas also proudly mentioned that Philippine Intellectual Property Rights laws are among the best, if not the best, in the region. We are still among the poorest in science, technology and engineering, however, and this is crucial to economic growth for any developing nation.

The last speaker was Dr. Rafaelita Aldaba, newly-appointed assistant secretary of the Dept. of Trade & Industry, another proud graduate of the University of the Philippines, having earned her Master’s and Doctorate degrees there, with further studies on Int’l. Economic Policy at the Kiel Institute of World Economy in Germany.  Dr. Aldaba is an eloquent speaker, but the lady could only do so much to defend the government she serves when asked by a member of the audience:  whatever happened to the industry roadmap that was promised to us a long time ago?

The Thought Leadership Forum was one good exchange of valuable inputs for the automotive industry, and though I believe that change will not happen overnight just because AFTA is finally here, the longer we take to attain competitiveness in the region, the less likely it will become a reality for us.

The second is this:  SL Agritech Corporation, the country’s leading hybrid seed producer, is now exporting not just the hybrid seeds, but also the hybrid technology as well.

S L Agritech is a division of the Sterling Group of companies and is one of the pioneers of the hybrid rice technology, which according to Dr. Frisco Malabanan, consultant for the company, is excellent for countries with a long stretch of wet season like the Philippines. 

SL Agritech has already shipped the seeds to Papua New Guinea and intend to plant as much as 30 hectares of land to hybrid rice.

Papua New Guinea is not a rice-producing country, yet the government there is interested in cultivating their large unplanted fields to hybrid rice.  SSL Agritech produces the hybrid seeds here and exports these to other tropical Asian countries.

It is a pity that not too many of our rice farmers here have adopted hybrid rice when it is much more cost-effective than the traditional rice seeds. According to Dr. Malabanan, for the traditional rice seeds or inbred rice, cost of production which includes the last stage of threshing is between P35,000 – 40,000/hectare while the cost of hybrid rice seeds is somewhere between P30,000–P50,000/hectare.  Income for inbred rice seeds is anywhere between P50,000–P60,000/hectare, while for hybrid, it is anywhere from P70,000–P150,000/hectare.  In Nueva Ecija, according to the SL Agritech consultant, which is an area where the hybrid technology has been embraced by many of its rice farmers,  income has been reported to be as high as P200,000/hectare.

That hybrid rice definitely gives a much better yield has been over-emphasized by the technology developers, yet our rice farmers are still very reluctant to go into it.  SL Agritech is already into commercial scale production of its hybrid rice seeds and is set to conquer many foreign lands. It is now the No. 1 hybrid seed company in tropical Asia. Yet, our very own farmers have yet to get their feet wet in this technology.  Why is that?

The key still lies in info technology, and the burden here lies with the government.  With a yield that translates to almost triple that of the traditional rice seeds, the small farmers can indeed realize bigger profits from their land and on a bigger scale, the country can attain rice sufficiency in just a few years.  We are a rice-producing and rice-eating land, and we should be able to do much more than aim for the smaller niche in the global market where red, brown and black rice belong.  Our premium white rice like the Jasponica and Miponica, the more popular varieties of the local Dona Maria brand, is just as white, just as fragrant and just as fluffy as the much-touted Japanese and Jasmine rice of Thailand. We already have the rice technology – why have we not reached their stature in the global market?

Mabuhay!!! Be proud to be a Filipino.

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