Insufficient

All of us are looking forward to the Senate hearing on rice smuggling scheduled for Thursday. Unlike that last forgettable hearing featuring Janet Napoles, we hope the senators will look at this issue with wider lens and a more strategic grasp of the problems.

After several extensions, the new global trade regime now opens our markets to rice trading. We can no longer maintain protectionist barriers around our rice production. Either we suddenly become more efficient at producing rice (which is unlikely) or our farmers will be undercut by imports.

The reason why so much smuggling of the staple commodity has been going on, especially over the last three years, is that our cost of production is much higher than elsewhere. While protecting our farmers, the restrictions on rice imports penalized our consumers.

The official numbers for our rice imports is closer to only a third of what international data says we actually imported. The only thing that can explain that gap is massive smuggling. Mind-boggling smuggling, in fact.

Perhaps Davidson Bangayan aka David Tan can enlighten us on the scale of rice smuggling going on —although that too is unlikely. More likely, this man will clam up. The volume of smuggled rice is such that it could not have happened without official connivance.

As hundreds of thousands of tons of smuggled rice flowed into our domestic market, some people were playing with President Aquino’s mind. They made him say really foolish things like the country being rice self-sufficient by 2013. Once, when we exported a few tons of boutique-variety upland rice, they made the President crow about our ability to export rice.

They made the President the laughing stock of our neighbors who were, in the meantime, happily unloading their rice surpluses on our market — often through the rice smugglers.

We can never be rice self-sufficient. Not even Japan could be rice self-sufficient even if Japanese consumers are willing to pay five times the price per kilo of the staple than what Filipinos pay. That will be about nine to ten times what the Vietnamese, the Thais, the Indians and the Chinese pay for their staple food.

Japan, Indonesia and the Philippines are archipelagic countries. We do not have the great rivers to irrigate our paddies. We use a lot of power pumping water from aquifers. We do not have enough land to cultivate a crop that uses much land and water — and sells at an uncompetitive price.

The mainland rice producers have a massive advantage in the large river systems fed from high mountain ranges all year round. They have integrated farming systems shaped through centuries of oriental despotism. With enough water, they could do multi-cropping.

It is insane to make rice self-sufficiency the goal of our agricultural policy. We will have a population of a hundred million this year. To meet our growing rice needs, we will have to tear up residential areas and reuse the land to cultivate a low-value crop.

What we need to do is prepare for free trade in rice to avert the annihilation of our farms.

Responsive

Last Dec. 30, while everyone was dealing with a hangover or preparing to have one, the DOTC announced yet another bidding for the LTO-IT project. Two previous bidding exercises failed.

The reason the previous exercises failed, and why the third one will likely fail, are the conditions set down by the DOTC. It seems they want a milking cow instead of a technology partner.

Too, the harrowing treatment current service provider Stradcom endured under the rule of Virginia Torres does not encourage new bidders. If the LTO can so whimsically withhold revenue flows due the technology partner, that raises business risks intolerably. Any new service provider is asked to borrow billions to set up its system without guarantee it will get enough revenue to constantly upgrade — not to mention maintain — that system.

The rules set down by the lords of DOTC bidding are clearly intended to exclude current provider Stradcom. To begin with, they want bidders to have foreign partners and propose systems already in use elsewhere. Stradcom is a completely Filipino corporation with a system already in place, incurring no major failures and no significant complaints against it.

The DOTC says Stradcom has not been “responsive” — although it fails to explain why. Rumor has it that the prejudice against Stradcom is political and not technical.

The current Stradcom system enabled drivers’ license processing in under an hour, renewal centers in malls, real-time results and checks-and-balances between government agencies. Today, erring drivers cannot get new licenses without paying traffic fines.

The IT solutions Stradcom delivered to LTO include: the Motor Vehicle Registration System (MVRS), the Drivers’ Licensing System (DLS), the Law Enforcement and Traffic Adjudication System (LETAS), the Revenue Collection System (RCS) and the Executive Information System (EIS). It took many years for Stradcom to evolve the components of the technology system that boosted the LTO’s revenues.

Yet, without specifying what is broke in the current system, the DOTC now wants to acquire a completely new (and untried) IT system and service provider. That is their prerogative, we can suppose, but only if someone else wants to take the risk offering its services to a highly politicized agency.

Actually, it is the millions of vehicle owners and applicants for drivers’ licenses who are put at risk by the strange prejudices affecting the DOTC. If flirting with a new system breaks down, millions of us will line up for days to register our vehicles or renew our licenses.