NFA TURNS 43 Yap: Let Filipino farmers compete in global market

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NFA TURNS 43 Yap: Let Filipino farmers compete in global market

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Yap
Yap

Filipino farmers have to be prepared for the lifting of quantitative rice import restrictions by July 2017.

For this, Third District Rep. Arthur Yap filed a bill amending Presidential Decree 4  to allow Filipino famers to export rice, and another, proposing to create a Rice Industry Development Act.

Yap said the Rice Industry Modernization Act he is preparing is basically a protection Act, something that done to the sugar industry.

The “40-percent duty on rice shipments for a yearly ‘minimum access volume’ of 350,000 tonnes” stands until July 2017, according to earlier reports.

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By July 2017, quantitative restriction will be lifted “which means we can then import rice coming into the country as long as it’s with tariff”.

“For the businessmen, this is good, because you then have a choice where you want to buy your rice. There will be stronger trade.  At present, there is quantitative restriction. Restricted ang quantity of rice. Come July 2017, there is no more restriction on the volume of rice. Businessmen can have the choice to buy rice—either Pakistani long grain, Indian Basmati rice, 5-percent premium from Thailand, rice from Vietnam, parboiled rice, or 25-percent broken rice. It will be up to the businessmen. However, this will have an impact to the farmers. Because once you can buy rice anywhere, you can choose not to buy Philippine rice. Of course, I hope you will continue to buy Philippine rice,” according to Yap.

Yap had been National Food Authority (NFA) administrator before appointed as agriculture secretary during the time of then President Gloria Macapagal-Arroyo, and had been in charge of the national rice self-sufficiency program.

During the 43rd anniversary of NFA celebrated on September 24, Yap shared insights on the future of the rice industry in the Philippines before GRECON-member retailers and NFA-Bohol employees led by Provincial Manager Peng Evasco.

During the occasion, Yap reported that he already filed the bill proposing to amend Presidential Decree 4, to allow Filipino farmers to export rice.

“It is so stupid and crazy that we can import rice. But Philippine farmers cannot export rice. Can you believe that? This is one bill I am fighting for. But considering the political climate as of now, lisud lisud na. tungod kay the attention of the politicians now is on the upcoming elections. But I will continue to fight for this. We have to amend the provisions of PD 4, because PD 4 was written in 1971 when they did not have so much capacity to produce rice. But now, we have the capacity to produce rice. We have to train our farmers to export rice. We can sell premium rice from all over the country. And our milling equipment have already improved. So we can compete. How can we compete right now when we don’t even allow them to export?” Yap pointed out.

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When the quantitative restriction is lifted in 2017, all tariff collections for rice importation should go to the rice industry, and the government should strengthen PhilRice, strengthen the technology in rice, Yap proposed.

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He also said more drying centers must be built all over the country and the agri-business sector should also continue building warehouses.

“They asked me, Mr. congressman, you were former secretary of agriculture, you were in charge of rice self-sufficiency program, is it really possible to improve our rice production?  Even without an additional square meter of new riceland, we can produce more rice. We can get it by improving the post-harvest. We are losing 15 percent from post-harvest. In the existing harvest, we are losing 15 percent. So if we continue investing on post-harvest facilities, we can add 15 percent more of the national harvest. Then embark on a national seed program,” Yap emphasized.

The government should refrain from relying on seeds from other countries as he cited that in 2008, “when there was a food crisis, China refused to export seeds. India refused to export seeds”.

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Proper use of water is already additional five percent to the output, while “correct drying is already additional 15 percent, assuming we do not cancel the 15 percent. There will only be 7.5 percent to add to the harvest”.

Investors can also come in to develop milling and storage facilities for the farmers.

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Anybody can start a storage business, not necessarily the farmers doing it. The farmers cannot be burdened further to get a loan from rural banks or loan sharks for it, and be paying 3-5 percent interest a month.

NEW DIRECTION FOR NFA

Yap also emphasized the need to draw new direction for NFA, which he said should remain under the Office of the President as a Government-Owned and Controlled Corporation (GOCC), while its regulatory function should be under the Department of Agriculture and its proprietary function should be separated.

NFA might even need to hire more people, instead of trimming down the manpower.

“I encourage you (NFA) to do a better job in what your doing. Tungod kay the realities in our situation now is we always hear comments that ‘we have to shut down NFA, we have to close down NFA because NFA is bleeding’.Kanunay madugangan atong national deficit tungod sa NFA. But the fundamental question is ‘Do we need or do we not need NFA?’ I think that is the more important question,” Yap said.

If Philippines was only a big connected country, it might not need an NFA, because the logistics would be efficient.

“But the reality is the Philippines is made up of many islands. We are an archipelago. During the times of crisis in rice distribution, we will always need NFA in partnership with our grains retailers. That is the reality. Unless you’re telling me that this is not the truth. But this is the truth. Very inefficient ang logistic system karon of the country. We will always need NFA. That is why, if we need an NFA, does it mean we will not improve our services?” he said.

Yap emphasized that the country needs the NFA, considering climate change world and the production and distribution of grains has changed all over the world and the distribution.

While more than 30-40 percent of the global production of corn is traded and more than 40 percent of wheat is traded, and more than 50 percent of Soybean is traded, only eight percent of the global production of rice is traded.

“You need to protect rice because only eight percent is traded and there are only two big producers in the world of rice—Vietnam and Thailand. Pag nag-usap yong dalawa, nagsabot, pa’no ka? Then ilan lang ang dako-dakong mgarequirements. Pag bumili ang Africa, tatamaan ka. Pag bumili ang Philippines may impact na on the global supply and demand of rice. That is why we continue to need NFA. But the issue is should NFA continue the way it is?

NFA is both a rule provider and a player. It is a rule provider, because it decides on the specifications of rice, accredits all the warehouses, and provide the buying price and the selling price of rice. NFA affects the market.

“If you are the decision-maker on the rules, is it proper that you are also a player? You will also conduct proprietary function in buying and selling grains. And there, I think, we can improve. As always, even when I was secretary of Agriculture, I already submitted a plan for NFA that the regulatory function should be left to DA with its different bureaus. But the trading function of NFA should be separated as a proprietary GOCC. And where should NFA if it is a proprietary company? Should we put you in the DTI. Should we put you in the DA? In my humble opinion, I don’t think we should put you in either,” according to Yap.

If NFA is placed under the Department of Trade and Industry (DTI), it might favor the consumers more.

“If you protect the consumers more, you will impact the farmers, because you will depress the buying and selling of rice prices. If NFA continues to be with DA, you are also going to protect the farmers more. Then you will impact the consumer prices outside. Sila naman ang maapektohan,” according to Yap.

Noting on the several years he had been with NFA, Yap said the present set up of NFA being under the Office of the President is ideal.

“Under the Office of the President, the President of the country can see what is more needed. At the time you need to protect the buying price of palay, the Office of the President can dictate. At the time the price of palay is alright, and the farmers are protected, then we can release. We can temper the release price of rice so that the consumers can also benefit, and the traders will earn as well,” he added.

This is not yet formalized and there is a need to pass law on this.

“We need NFA, because we are an archipelago. We need somebody to buffer stock during crisis, somebody to distribute rice during national calamities, to play in the market to ensure that there is a good buying price of palay. We need NFA there, because when you distribute rice, we need to protect the consumers as well,” Yap pointed out.

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