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THE
Department of Agriculture (DA) has signed an agreement
enabling the Philippines to import up to 1.5 million
metric tons of Vietnamese white rice to help beef up
local stockpiles and guarantee Filipinos ample supply in
the coming months.
The
signing of the Philippine-Vietnam memorandum of
agreement (MOA) by Agriculture Secretary Arthur Yap and
Vietnamese Industry and Trade Minister Yu Huy Hoang was
inked on the sidelines of the two-day Philippine
Development Forum, which ends Thursday.
“[We
entered into this agreement] in order to ensure that the
rice market is stable in both countries and to cushion
the adverse effects of climate change, pest infestation,
drought, floods and other calamities that are being
experienced and may hereafter be experienced by the
Asean countries,” Yap said in a statement.
Relatedly, Sen. Francis Escudero said the country’s
rice-import bill is expected to shoot up to P58.7
billion even as he estimated that the cost of
subsidizing cheap rice sold by the National Food
Authority (NFA) could reach P21.7 billion this year.
He based
his forgone subsidy projections on rice costing
P29.40/kg to import, which the NFA will likely continue
to sell at P18.50/kg.
Escudero
explained that the P10.90/kg difference would be the
“political premium” the Arroyo administration will have
to pay to “prevent the perceived shortage of the main
staple of 90 million Filipinos from exploding into a
crisis fatal to an already faltering government.”
The
senator added that if the cost of imported rice rises to
$707 per metric ton (MT)—which, he said, was what the
government paid for the 335,000 MT it bought this
month—then the 2 million MT that it plans to bring in
this year will cost P58.7 billion, based on a P41.50 to
$1 exchange that is still higher than the official
foreign exchange forecast.
“Of this
amount only P37 billion can be recouped, assuming
completely zero trading, storage and transport losses,”
he said.
Escudero
said the estimated import price tag assumes no tax or
duty paid, which is 40 percent of imported value under
the country’s World Trade Organization commitments, a
rate which, however, can be waived if food shortage is
invoked. He doubted if duties will be fully waived as
tax payments on rice imports, also called Tax
Expenditure Fund, “bloat the tax effort and make for a
beautiful revenue report card.”
Escudero,
who chairs the Senate ways and means committee,
estimated that the P58.7 billion required to import rice
is “equivalent to what we can collect from VAT [value
added tax] on fuel this year. To give you an idea how
big it is, it’s bigger than the budget of the AFP [Armed
Forces of the Philippines] or the PNP [Philippine
National Police], and five times the allocation for the
DOH [Department of Health].”
“Taxes
collected on the gas pump will just be swapped for rice.
The rise in the world prices of rice, which translates
into bigger corporate subsidy for the National Food
Authority [NFA], was never factored in this year’s
expenditures,” he explained. As a result, he added, the
plan to have a balanced budget this year “is in peril.”
According to the MOA signed by Yap, the Vietnamese
government agrees to sell, unless under circumstances of
natural disaster and harvest loss, and the Philippines
agrees to buy, up to 1.5 million MT of Vietnamese white
rice annually starting this year.
This,
the pact said, will also be subject to market and
production conditions and to terms allowable under
applicable laws of both countries.
The
agreement tagged the Vietnam Southern Food Corp. and the
NFA as those authorized to implement the terms of the
MOA, to be in effect for three years with automatic
renewal for another three years.
The
agreement will continue unless terminated by either
party through diplomatic channels six months prior to
the intended date of termination.
Yap said
both the Philippines and Vietnam also agreed to
implement “strict measures” to stop illegal rice trading
between the two countries.
The
Agriculture chief said the Vietnamese commitment would
be complemented by the move of the
United States’
Department of Agriculture to increase the
Philippines’
credit commodity program to $75 million. This, he said,
will clear the way for an additional 100,000 MT of US
rice into the country.
He also
assured consumers that the country has enough rice in
retail markets, noting that stockpiles will be beefed up
in the months ahead through the supply commitments from
Vietnam
and the US, along with projected record harvests this
summer and main or wet planting seasons.
Yap
noted that climate change has also wreaked havoc on
farm-production targets worldwide. He said, however,
that the Bureau of Agricultural Statistics (BAS) also
expects the April-June harvest season to yield 7.1
million MT, higher than the 6.7 million MT recorded in
the same period last year.
The
projected bumper harvest this summer has buoyed DA
hopes, said Yap, of hitting its 2008 production target
of an all-time high of 17.32 million MT, beyond 2007’s
total yield of 16.24 million MT.
Meanwhile, President Arroyo also ordered the revocation
of licenses of the roughly 5,000 NFA retailers in the
country to flush out hoarders and other erring grains
traders, and for the food agency to reaccredit only
those engaged in legitimate marketing or trading
activities.
At the
same time, NFA warned rice hoarders and the ordinary
people against panic buying, stressing there is ample
supply of rice in the country.
At the
weekly Fernandina Forum in Club Filipino in Greenhills,
San Juan City, Rex Estoperez, NFA spokesman, said the
public should not worry over reports of rice shortage
because this is untrue.
“May
sapat na supply [of rice]. ’Wag mag-panic
dahil ito ang nagpapalala sa sitwasyon at sasamantalahin
ng mga rice traders at palalabasin na magkaroon ng
artificial rice shortage,” Estoperez said.
He
advised the people to buy the quantity of rice enough
only for their needs.
He urged
the public to report cases of hoarding, switching or the
selling of NFA rice at commercial rice prices.
Surprise
inspections on retailers and warehouses are also
planned.
It was
learned that Filipinos consume some 33 tons of rice
every day, and a considerable amount is being wasted or
thrown away.
This
developed as Senate President Manuel Villar moved to end
the NFA monopoly on rice importation, arguing that “the
exclusivity clause that authorizes only the NFA to
import rice has to be repealed as it had been attended
by allegations of corruption.”
“The
system no longer works and has to be reformed to include
other sectors,” Villar said in filing Senate Bill 1897,
which grants farmers’ cooperatives and related
organizations the authority to import rice “as a way to
increase their income.”
Villar’s
bill also proposes to use NFA funds only in purchasing
locally produced palay or farmer imports for the
food-security requirements of the country.
At the
same time, Sen. Loren Legarda pushed for a more
aggressive irrigation and farm-support program, which,
she stressed, is needed if the Philippines is to achieve
100-percent rice sufficiency from local production.
While
the government reported a 5.96-percent increase in total
rice production in 2007 to reach 16.24 million MT, the
output could have been better if not for the adverse
impact of climate change in the second and third
quarters of last year, she noted.
“IRRI
[the International Rice Research Institute] has reported
that the Philippines is one of two countries in Asia
whose rice productions are most affected by the El Niño
phenomenon. This need not be the case if only all of our
farmlands are irrigated and not dependent on rainfall,”
Legarda added.
With the
effects of climate change worsening every year, she
wants government to aggressively pursue global
warming-mitigation activities, especially against
drought. |
