P-Noy rules out rice importation

MANILA, Philippines - President Aquino has ruled out any rice importation this year after meeting with Agriculture Secretary Proceso J. Alcala and Economic Planning Secretary Arsenio Balisacan.

Alcala said a recent meeting with the President and the director general of the National Economic Development Authority yielded an agreement that no rice importation should be made for the rest of the year and that any foreign procurement of the commodity after 2013 would be made only after determining its necessity based on a full assessment of the country’s stock position.

 â€œThat (stock position next year) we would know from the volume of harvests in the remaining months of 2013,” Alcala said, optimistically predicting that the harvest volume might even exceed the 2012 figures and post another historic high.

The 2012 volume of palay production soared to a record high of 18.03 million metric tons, or eight percent more than the previous year’s.

Corn production, likewise, posted a six-percent year-on-year increase to an unprecedented volume of 7.41 million MT in 2012.

Asked what convinced the NEDA to soften up on its demand for a 500,000-MTimportation to ensure sufficient rice supply, Alcala simply cited the “farmers’ welfare and interest.”

Long advocating against rice importation as a disincentive to farmers and the national pursuit of rice sufficiency, Alcala warns that farmer may just give up and shift to other means of livelihood.

He cited as example the ageing and dwindling population of farmers, particularly in the rice sector.

“The situation could only be reversed if we raised the proficiency, productivity and profitability of rice farming and other areas of agricultural production and enterprise,” Alcala stressed.

“That’s why the DA (Department of Agriculture) is doing its best to protect the rice farmers from unscrupulous traders who try to keep their control of the commodity from both ends of the supply chain,” Alcala said, citing it as reason for the artificial shortages and the resulting price hikes being experienced by consumers.

“Rice cartels are inclined to do that (price manipulation) to increase profits because the margin in rice trading is quite thin under normal circumstances,” Alcala explained.

“So even this early, we are opening up new markets, particularly for rice export,” Alcala added.

The Philippines is now exporting fancy rice to widen the farmers’ market options and keep them in the industry, while developing a hedge or an equalizer against dollar outflow from importation.

Thus, the continuous decline in rice importation has been saving the country billions of dollars in foreign exchange, amounting to $1.4 billion in 2012 and an estimated $1.8 billion in 2013.

From a total rice import volume of 2,399,403 MT in 2010, the DA has steadily reduced it to only 1,063,985 MT in 2011, 688,559 MT in 2012, and 208,600 MT as of last July 18.

For the very first time, there was zero importation by the private sector during that almost seven-month period in 2013.

In terms of actual arrivals, rice importation by the government through the National Food Authority dropped steeply from 2,149,096 MT in 2010 to only 251,300 MT in 2011, 119,776 MT in 2012, and 205,700 MT as of July 18, 2013.

Nonetheless, traders may import up to 350,000 MT after 2013 in keeping with the country’s Minimum Access Volume (MAV) commitment to the World Trade Organization as provided in the General Agreement on Tariff and Trade.