Sugar supply stabilization, not import liberalization, sought by food/agriculture processors, 105,000 MT allocation asked

October 14, 2019

Food and agriculture processors have asked for a sugar import allocation of an estimated 105,000 metric tons (MT) annually to stabilize their manufacturing input and raise their global competitiveness with heftily lower cost.

   The Philippine Chamber of Agriculture & Food Inc (PCAFI) and member  Philippine Food Processors &  Exporters Organization (Philfoodex) is asking Agriculture Secretary William D. Dar to grant a maximum of 10% sugar import allocation.

   This is out of the country’s annual sugar production placed at 2.1 million MT.  However, even just half of this amount, or 105,000 MT will be good enough to significantly raise food processors’ global competitiveness.

   It will cut sugar cost for food manufacturing from P55-P60 per kilo locally to P28-P30 per kilo in other South East Asian countries, particularly Thailand.

   PCAFI President Danilo V Fausto said this petition of PCAFI and PHilfoodex for an import allocation will be accompanied by an implementation mechanism to ensure it does not adversely affect local sugar farmers’ plight.

   “We’ll issue a petition to be submitted to Secretary Dar and President (Rodrigo) Duterte. We will also propose an implementation mechanism that will ensure this allocation will not go to the retail market but rather help our food producers become competitive,” said Fausto.

   Philfoodex President Roberto C. Amores said not even the entire 10% of production will be asked by processors.

   Initially, only 50% of each company’s sugar requirement based on its production program is proposed to be granted to the company.

   “We’re not talking about even 10% of the 2.1 million.  We’re not requesting for liberalization. We’re requesting for import allocation for stabilization for the cause of processors,” Amores said.

   “As a processor, you will submit your requirements based on your production program and sales. And you will be given only 50% of your requirement (not 100%).”

   This initial allocation per processor will establish credibility of the processor. 

   The processor should  guarantee that the sugar import will be used solely as input for its food manufacturing, not for retail to the domestic market (adversely affecting sugar farmers’ income).

   Dr. Rolandy Dy, Center for Food & Agribusiness (University of Asia & the Pacific) chief and PCAFI member, said the sugar import allocation for local food processors is necessary.

   “We’re not competitive.  Never mind (if we’re not competitive in) softdrinks which is not exportable because softdrinks are heavy. The problem is we’re not competitive in products like biscuits, candies,” said Dy.

   Filipino food processors can hardly compete with ASEAN biscuit manufacturers.

   “I’m talking about those 4,500 food processors who are paying P55 versus P28. When Apollo biscuits from Malaysia (or Indonesia) arrive here, it’s only P10. Pero pag gumawa si Mang Pandoy ng Apollo biscuits nya, P15 ang puhunan nya,” said Amores.

   (If Filipino businessman Mang Pandoy produces his own Apollo biscuit, his cost is at P15).

   Some groups have opposed such allocation due to past experiences when some imports for manufacturing input have been diverted to the domestic market. 

   This concerns not only sugar, but other imports such as carabeef (carabao meat from India).

   But a proven effective mechanism to control such diversion is to make the food manufacturers themselves to police their ranks, PCAFI said.

   Fausto said members of PCAFI, Philfoodex, and the Philippine Chamber of Commerce and Industries (PCCI) may be tasked to monitor if the import allocation is being diverted to the market.

   Amores stressed food processors’ import need is not for liberalization.

   “I would like to correct the impression that this is liberalization. The sugar industry in Negros has been writing all over the news that the private sector led by me is espousing liberalization. It’s not,” he said.

   “We all know that since our sugar sector is not competitive, we can’t be self-sufficient in sugar as sugar area is declining.  But we have to admit some traders are riding on this issue in the guise of protecting farmers.”

   Also, it is initially proposed that the state-owned Philippine International Trading Corp (PITC) be the one to do the importation.

   Philfoodex lamented that while the Sugar Regulatory Administration (SRA) had once approved sugar importation for 170,000 MT, this volume has not benefited food processors.

   Since SRA issued a memorandum allowing this volume to be designated as “reserve,” some of this sugar found their way into the domestic market since reserve sugar is allowed to be released domestically.

   “But we have not benefitted from this allocation,” said Amores. (Melody Mendoza Aguiba)

70% rice tariff, urgent rice safeguards implementation asked

October 2, 2019         

A rice tariff of at least 70%, as sanctioned by the Rice Tariffication Law’s (RTL) safeguards provision, was pressed to be urgently implemented by government to arrest further imports hitting beyond all-time high records, saving Filipino farmers.

   The safeguards will also save government from needing to spend huge funds for conditional cash transfer or farmers’ loan, now placed by Department of Agriculture (DA) at P15 billion, just to spare Filipino farmers from serious economic damage.

   The private sector, representing thousands of Filipino farmers under its wings in the supply chain, has pegged desired rice tariff to at least 70% in order to beef up global competitiveness of  Filipino produce.

   At the same time, the Philippine Chamber of Agriculture& Food Inc. (PCAFI) asserted that it strongly supports the RTL, contrary to what may be perceived by some groups.

   “We are supporting the law. Therefore let’s implement the law. We want the law, that’s why we want it implemented,” said PCAFI President Danilo V. Fausto.

    PCAFI warned the continuous influx of cheap imported rice may threaten the country’s national security, prompting hungry farmers in the rural areas to resort to joining communist rebels.

   “We have to assess the situation because any further damage may affect our national security.”

   Unlike the position of some groups adversely affected by the RTL, Fausto said PCAFI wants RTL upheld through immediate implementation of its explicit provisions.

   “We’re not asking for a repeal of the law or an amendment of the law.  And if the law says, section 10 of Republic Act there are safeguards, let’s implement it.”

   A tariff rate of at least 70 percent should be reasonable enough to give the Filipino farmers at least the “temporary” yet extra edge against imports.

   “Our palay price is now at around P12 per kilo. But NFA should buy it at P17 (to aid farmers).  At that buying price, it will sell in the retail market at P34 per kilo, when milled.  Then domestic rice will even out with the imported at P34,” said Fausto.

   With price of both domestic and imported rice at same level, “why would you bother importing?”

   Ernesto Ordonez, PCAFI trustee and Agri Fisheries Alliance (AFA) chairman, said the imposition of safeguards from the current 35% level is urgent even as there are trade notification rules involved.

   AFA is composed of five sectors: farmers and fisherfolk, (Alyansa Agrikultura-AA), agribusiness, PCAFI, science and technology (Coalition for Agriculture Modernization in the Philippines – CAMP), rural women (Pambansang Kilusan ng Kababaihan sa Kanayunan – PKKK), and multisectors (Agrifisheries 2025 – AF2025). 

   “We do not want a repeat of the mistake during the 1990’s when we agreed to the too rapid tariff reduction without giving the farmers the necessary support services and the WTO-approved safeguard measures,” said Ordonez.

   Ordonez cited the Department of Agriculture September 9 national survey where imported rice with the 35% tariff caused farmgate wet palay prices in Regions 2, 3, 11 averaged P12.10 a kilo, barely above the P12 production cost.

   CAMP President Emil Javier favored measures like cash transfers and assistance in credit, technology, and marketing.

   AFA stated it rejects calls for a return to government rice import monopoly and supports food security instead of food self-sufficiency.

   “In areas where rice production is not competitive, the government must provide assistance for transition to higher value crops,” said Ordonez.

   The tariff protection under safeguards will just be a temporary, a transitory, policy, PCAFI asserted.

   “DA should immediately implement it as promised it should be by October 1.  Anyway, that will just  temporary, while we’re trying to give our farmers time to upgrade their competitiveness.”

   Now at 2.4 to 2.5 million MT (MT), imports must immediately be curbed.  The Foreign Agricultural Service (USDA)  placed projected import for the year to hit 2.6 million MT.

   Fausto said even a P34 against P34 per kilo Filipino against import price will be enough.

   Imported rice is currently being traded at around P17 per kilo.  With trader’s overhead, it rises to P20 per kilo, and finally to P27, P28 per kilo in the retail market (with logistics costs). 

  “But imported rice should be at least equal the local market price.  That will make them lose over domestic rice.  Now, NFA should ensure farmers dictate the buying price of palay at P17 per kilo for dry and P13, P14 per kilo for wet.”

   PCAFI Trustee Elias Inciong is questioned why some groups may be opposing the safeguards implementation even if they are representing sectors that are not rice-related as compared to suffering rice farmers.

   “They don’t want higher tariff?  Why?  Because it will affect consumers? (or their businesses?)”

   But PCAFI, some of whose members themselves plant rice in poverty stricken, rural areas, want more protection for precious but few Filipino farmers that remain sustaining to raise the country’s food security.

   Under Republic Act 880, the Safeguard Measures Act, safeguards may be imposed in the following conditions (Rule 2.2a-c) all of which conditions are reported to have been happening after the RTL implementation:

  • significant idling of productive facilities in the domestic industry including the closure of plants (rice mills) or underutilization of production capacity
  • inability of a significant number of firms to carry out domestic production at a profit
  • significant unemployment or underemployment within the domestic industry.

Suspension of pork imports asked until “genuine” quarantine system that ensures tariff/duties collection is in place

September 21, 2019                                                                        

The Philippine Chamber of Agriculture and Food Inc. (PCAFI) supports the call of the Samahan ng Industriya sa Agrikultura (SIK) for government to suspend importation of pork until a genuine quarantine system is in place at Customs borders.

   That policy will not only ensure animal protection from infection of the dreaded African swine fever (ASF). It will also ensure that proper tariffs and duties are paid.

   The government—the Bureau of Customs (BOC)—currently does not have the full capability to carry out strict biosecurity system that will guarantee that no imported meat products infected with ASF will enter the country.

   These BOC deficiencies include the absence of  refrigerated facilities where the meat products may be adequately inspected for quarantine systems by the Bureau of Animal Industry (BAI) and the system for proper collection of tariffs and duties.

   These deficiencies derail implementation of proper  animal and food safety along with proper revenue collection from meat imports.

   “The current ‘make-do’ second border system inside the cold storage facility of the importer is meaningless in terms of proper collection of tariffs and duties, quarantine and food safety,” said PCAFI President Danilo V. Fausto.

   Such government practice of allowing meat imports to be directly transported to warehouse of importers before these are evaluated for quarantine procedures and charged with tariffs and duties have long been questioned by agriculture stakeholders.

   “The Bureau of Customs has no refrigerated facilities within the  Port of Manila which has prevented the Bureau of Animal Industry (BAI) from implementing quarantine protocols,” Fausto said.

   Poultry and livestock industry stakeholders have long recommended that all meat imports should just go through a single port with the necessary facilities for a full quarantine process.

   The agriculture stakeholders have asserted government’s role in implementing biosecurity systems against ASF will be crucial. 

   Likewise, all local government units (LGUs) should consistently impose on all backyard hog raisers to obtain business permit for their operations even as some LGUs do not even know that hog backyard raisers exist in their jurisdiction. 

   LGUs will have a critical role in this biosecurity system considering that nearly 70 percent of all hog production in the Philippines comes from backyard raisers. 

   “LGUs should be held liable on the control of African swine fever within their area,” said Fausto.

   At the same time, even sari-sari store operators should be monitored for keeping business permits through which a system may be implemented on controlling consumption of meat that may be affected by the disease. 

Stricter biosecurity measure on pigs urged by PCAFI after hog disposal in Marikina river

Stricter biosecurity measure on pigs urged by PCAFI after hog disposal in Marikina river

September 13, 2019

The private sector has urged government to implement stricter biosecurity measures against the spread of Asian swine fever (ASF) on hogs but also assured consumers that humans cannot be infected by the disease.

   The Philippine Chamber of Agriculture and Food (PCAFI) urged the Department of Agriculture (DA) and local government units (LGU) to intensify implementation of protocol in disposing of dead hogs.  This as some of the dead hogs suspected of having been infected by ASF have been found floating in the Marikina River.   

   “Offenders should be prosecuted as this is apparently a violation of certain memorandum act of DA regarding the disposal of dead hogs,” said PCAFI President Danilo V. Fausto.  “Stricter implementation of biosecurity procedures should be observed.”

   At the same time, Fausto said there should also be more information program declaring the scare against hog consumption since ASF does not adversely affect human health.

   “People should not be afraid of ASF,” said Fausto.

   Edwin Chen, president of PCAFI member Pork Producers Federation of the Phils (Propork), said hog raisers, particularly those from small backyards, should be advised to observe proper disposal of dead hogs.

   “If the farm is in the backyard, the hogs (affected by the disease) should be culled first then buried immediately outside the farm at a depth (that may not be disturbed by other animals.) Depending on the number, it should be within a certain depth, maybe two meters if there are only a few.”

   “In commercial farms or in a locality, DA people have a designated areas for burying these. The site should not be near a waterway or a creek.”

   DA spokesman Noel Reyes said government will be prosecuting offenders on the handling of dead hogs based on the Animal Welfare Act and the Solid Waste Management Law.

   There are several other ways of controlling spread of ASF, according to authorities. The Disease and Welfare guide of the advises the following:

  • Prevention of feeding of contaminated feed and contaminated food waste used to supplement hog feed
  • Control of the animals from the bites of soft bodied ticks, lies and flies
  • Prevention of inoculation of the pigs with contaminated syringes and use of contaminated surgical equipment
  • Prevention of introduction of infected pigs with uninfected ones. (Melody M. Aguiba)

DA to impose SPS measures vs bukbok-packed (pests) imported rice

September 2, 2019

The government will impose sanitary and phytosanitary (SPS) measures against imported rice as imports have ballooned to 2.2 million metric tons (MT) for a quality found to be “bukbok-packed” (pests) to Filipino consumers’ health detriment.

   Imported rice has been found in the past to be needing heavy pesticide-spraying due to the bukbok.

   Department of Agriculture (DA) Secretary William D. Dar said Saturday DA at a forum with the Philippine Chamber of Agriculture and Food Inc (PCAFI) said government will impose SPS measures. 

   This is sanctioned within its agreement with the World Trade Organization (WTO) to curb poor quality rice imports.

   “We have asked BPI (Bureau of Plant Industry)  to implement protocol in import regulations regarding pesticide residue, presence of storage pests before the issuance of SPS (certificate) for imported rice,” said Dar at the PCAFI meeting held at the Quezon City Sports Club.

   Dar said DA will correct several policies and impose new ones to ensure the benefit of both Filipino farmers and consumers.

   “Those that say DA should rather be called Department of Importation, to some extent that’s true.  And we will correct that eventually.” Dar said.

   One of the policies being studied is the recommendation of PCAFI for the imposition of special safeguard measures, similarly sanctioned by the WTO, to ensure entry of dumped rice does not endanger the local industry.

   “We’re also now studying the possibility of special and general safeguards measure.  If there’s excessive rice import, we will limit these.  We will stop rice from coming from its origin as it’s affected by bukbok,” said Dar.

   PCAFI President Danilo V. Fausto said such special safeguard measure is a government right as part of protecting its own people.

Danilo V. Fausto, PCAFI President

   Section 7 of Republic Act 11203 (Rice Tariffication Act) indicates government may “increase, reduce, revise” import duty rates (given certain conditions) consistent with “national interest” and the “objective of protection Filipino farmers and consumers.”

   These are possibly other immediate measures of DA in protecting farmers and consumers from the adverse effect of RA 11203 implementation:

  • Imposition of a Suggested Retail Price (SRP) “when figures don’t reflect true value of price” to ensure traders do not take advantage of the situation by “managing” or stopping inflow of supply to domestic market, thereby causing price to shoot up. 
  • DA will study the reason why rice price has not gone down considering huge imports since March upon ratification of RA 11203.
  • Government will legislate increase in rice buffer stock from 30 days to 90 days.  This will provide higher government budget for buying of palay of Filipino farmers’ produce, ensuring better income for farmers.  This may also raise National Food Authority’s (NFA) ability to buy rice from Filipino farmers up to 5% of total rice production, versus the current 1% or less.
  • Enjoining Local Government Units (LGUs) to engage in the business of buying palay, milling, storing, and distributing with the objective of immediately releasing rice stocks so that “turnover” of the value of rice may be realized, bringing multiple profits to Filipino farmers and other stakeholders.  LGUs may also manage warehousing and maintenance of farm machineries as part of a “tripartite agreement” with DA and farmers.
  • National Food Authority’s  warehouses will be leased out to LGUs  who have the advantage of strategically being located where farmers’ produce are, thereby becoming efficient in managing this business.

   However, Fausto warned DA should ensure that this LGU business of rice buying and selling should be an “honest to goodness” one and should not be used by LGU leaders just to benefit those that patronize them.

   “You have to be very careful because LGU leaders are political people.  You can legalize vote buying through this system.  We’re not generalizing all political leaders.  But at the end of the day, some look for votes so that they or their relatives will win again next term,” said Fausto.

   “It should be an honest to goodness way of buying of palay from all sectors, and selling to all.  It should not only benefit the selected few (voters),” Fausto said.  

   This new LGU rice buying and selling, though, definitely has advantage in providing budget for maintenance of warehouses and rice machineries.

   “There’s no issue if government maintains machineries.  There should be training of people on these skills and in marketing goods.  If the machines break down, or the warehouses need repair, there will be a budget that may be lent to the LGU,” said Fausto.  (Melody M. Aguiba-Growth Publishing)

Non-tariff measures, Land Use Plan to be adopted by Duterte Admin as milestone policies for agri modernization

Non-tariff measures, legislated Land Use Plan to be adopted by Duterte Admin as milestone policies for agri modernization

September 1, 2019

Non-tariff measures (NTM) and a legislated Land Use Plan will be adopted by the Duterte Administration as major milestone policies that are seen to catapult Philippines to agricultural modernization.

   In a forum with the Philippine Chamber of Agriculture and Food Inc. (PCAFI), Department of Agriculture Secretary William D. Dar declared Saturday these two major policies as an official government stance for the first time since Philippines joined the World Trade Organization (WTO) in 1995.

   The NTMs will include subsidies for ensuring Filipino farmers will be globally competitive and will have capability to export goods. 

   NTMs will also support Filipino farmers in the form of stricter sanitary and phytosanitary rules for imported goods and other support–  farm to market roads, post harvest facilities, research fund, skills development upgrading.

   “If we need to subsidize, we must subsidize.  That’s a policy direction. There are many ways, not only subsidy, that may be used under the WTO (to help farmers).  New equations, when you promote these in a big way, (will benefit farmers). We will take this route so we can become productive and competitive,” said Dar at a PCAFI meeting at the Quezon City Sports Club .

PILLARS OF AGRI MODERNIZATION. Agriculture Secretary William D. Dar (second from left) speaks on Agri Modernization  before a PCAFI meeting at the Quezon City Sports Club together with (L to R) PCAFI Chairman Philip Ong, former DA Secretary Luis P. Lorenzo Jr., and Rolando Dy of the University of Asia and the Pacific.

   Dar’s declared policy toward NTM was a response to PCAFI’s position that the government has not supported the local farm sector with NTMs openly practiced by developed countries (United States, Japan, European countries).

  PCAFI President Danilo V. Fausto said the US government approved a Farm Bill providing for $850 billion budget including subsidies for American farmers.

   “That’s against our P70 billion budget that’s all there is for our farmers for this year,” said Fausto.

   Also PCAFI member, Lawyer Elias Jose Inciong of the United Broilers and Raisers Association, said the National Economic Development Authority and other economic team members in the country have all along ignored the fact that foreign farmers are heavily subsidized.

   The Doha Development Round of WTO that commenced in 2001 in fact broke down because developed countries refused to give in to removing subsidies, all other trade support, for their own farmers.

   “What enables other farmers is subsidy. That’s why the Doha development round of WTO, the development aspect, has been abandoned. Its’ not there anymore. Yet, our policy making is very silent on the issue of subsidy.  The economic team will rather blame the agriculture sector of not being competitive or of having protectionist mindset,” said Inciong.

   “But obviously our farmers don’t have subsidy.  Ever since we got into the WTO, we’re competing not only with foreign partners, foreign companies, but foreign governments who subsidize their sector,” said Inciong.

   Dar also took a position that a Land Use Act (LUA) should be legislated, a major policy pushed by the private sector for many years as it protects use for agriculture, but a policy that faced opposition from some legislators.

   “Our position is we don’t have a land use system. That’s the issue of land conversion on one side.  But bright agricultural lands, much more those with irrigation system, must not be converted (for industrial or residential use,”  Dar said.

   Fausto said the LUA will solicify the presence of investors in agriculture.

   “Our investors will have stability with Land Use Act. They’re putting in millions and millions in investments.  But at the end of the day, their land may be converted because we don’t have a proper land use law.  Lands that are perfectly productive should remain producing food for our country,” said Fausto.

   Dar said the LUA would have been ratified a long time ago.

   “The issue of land use is issue has been there for the last 30 years.  We hope this time around, it has to be legislated.  There should be a comprehensive land use for every area.  (Even without the law yet), Local Government Units should now go forward and  start land use planning,” said Dar.

   The PCAFI forum with Dar was attended by close to 200 agriculture sector leaders in the private sector coming from 23 different farm subsectors. (Melody M. Aguiba)

Private poultry sector urged govt to monitor Custom Bonded Warehouse import irregularities

August 26, 2019

The private sector has pressed government to address import irregularities, especially of Customs Bonded Warehouse (CBW), that allows dumping of cheap poultry imports adversely affecting small producers as imports peaked to a record 310 million kilos (2018).

   The United Broilers and Raisers Assn (UBRA) has asked newly-appointed Department of Agriculture (DA) Secretary William D. Dar to put in place system to systematically monitor imports,  particularly that of CBW.

   UBRA leaders, , together with Philippine Chamber of Agriculture and Food Inc (PCAFI) President Danilo V. Fausto, just met with Dar regarding reform recommendations in specific farm sectors.

   The poultry raisers are asking DA to keep a data monitoring of CBW chicken imports. 

   “(In the past), DA has shown no institutional commitment to address unfair trade and smuggling. They  can’t even present data on customs bonded importation,” said UBRA President Bong Inciong.

   “It is so obvious that there’s irresponsibility on the part of the government.  When you say customs bonded warehouse,  you’re supposed to (use imports for manufacturing input)and re-export, but DA has no data showing what is being re- exported.”

Newly-appointed Department of Agriculture Secretary William D. Dar meets with farm sector leaders led by Philippine Chamber of Agriculture & Food (PCAFI) President Danilo V. Fausto. (From left) Ernesto M. Ordonez, (Alyansa Agrikultura); Francisco Buencamino (meat processing); Salvador Salacup; Gregorio San Diego (poultry-United Broilers & Raisers Assn); Roger Navarro (Phil. Maize Federation Inc.); Dar; Fausto; Roberto Amores (Philippine Food Processors & Exporters); Noel Reyes, DA; Edwin Chen, (hog-PROPORK). The farm leaders strongly urge the new secretary to carry out reforms that will raise local food production that creates rural jobs and regulate and curb excessive imports.

  Although 30% of these CBW imports are allowed to be distributed to local markets (supermarkets, wet markets), such volume has to be paid with tariffs.

   “But there’s no record showing they pay tariffs. Here is where we find it hard to look up to government.

They have a mandate to develop local industries. How can you develop your industry if you don’t have data, how can you manage?” said Inciong. “They keep talking about competitiveness about addressing unfair trade, smuggling when they don’t even bother to organize data.”

   Fausto said the poultry industry is a top priority in the agriculture sector as it is the sector generating the third highest revenue, following only rice and pork.

   Philippine Statistics Authority (PSA) data showed gross value of poultry production as of the first quarter of 2019 was at P55.4 billion.

   Inciong said there is a globally recognized system to monitor technical smuggling—that is comparing local import data compared to imports being reported from country of origin. But DA is not even adopting this system. 

   This absence of CBW monitoring record applies too with the Bureau of Animal Industry (BAI) and National Meat Inspection System (NMIS), UBRA said.

   The poultry raisers are also raising the following problems with Dar:

  1. Government’s priority for importing poultry and other farm goods compared to developing local farm sector.

   “Government has the fondness for justifying imports.  This is the opportunity that has high gov ernment support. Last year, inflation was high, they all panicked and removed safeguards for chicken.  So in September 2018, we were (selling chicken at) below cost all the time.  Our cost would be higher than the few years ago,” said Inciong.

  •  Market imperfection—farmgate prices do not directly affect consumer price.  Even if farmgate price plunges, consumer price is the same.

   “In July farmgate price was at (a very low) P81 per kilo.  But market price was still high at P170.  In July, farmgate price increased to P106 per kilo, and the retail price for consumers is still the same,  at P170.  Our position is imports do not benefit consumers.  That’s true for rice, corn, chicken, and other agri products.”

  • Lack of coordination between Board of Investments (BOI) and DA.  BOI may be giving unnecessary incentives to new poultry manufacturing applicants by using incorrect assumptions.     

   In the past, there was an instance BOI gave incentives on the assumption there is a huge demand-supply gap for MDM mechanically deboned meat (MDM).  This assumed this poultry classification renders the product useful for preparing chicken in the usual way (tinola, frying, turbo, etc). But  MDM is really used as extenders in siomai or other processed meat.

   “BOI invited the investor on the belief there’s massive shortage of chicken based on MDM data. But they  just damaged the industry.”

   Nevertheless, Inciong said Trade and Industry Secretary Ramon Lopez and DTI Undersecretary  Ruth Castelo just met this month with UBRA regarding this concern of the sector.

   PCAFI has also urged government to recognize huge trade subsidies being granted by other developed countries to their farmers, including poultry raisers, and similarly support Filipino farmers this way.

   “Subsidies in one form or another have been the template for other countries with successful agricultural sectors.  If we are to win the struggle for the future of agriculture, a more pragmatic approach as practiced by US and China should be the way forward,” said Fausto.

   The United States Farm Bill as of 2018  placed farm support at $867 billion including huge trade support for making sure American farmers get a higher price for their produce even despite lower market prices.

  Data monitoring of imports will be pivotal in helping raise small poultry raisers’ income amid global trade liberalization.

   “The mindset of government is more imports, more local players will be forced to be competitive. But the government is the one that’s not competitive because it doesn’t provide the sector the amount of subsidy other governments provide their agri sector,” said Inciong.    Chicken imports consistently rose from 135 million kilos in 2012, 141 million kilos, 2013; 177 million kilos, 2014; 198 million kilos, 2015; 232 million kilos, 2016; 244 million kilos, 2017; and 310 million kilos, 2018. (Melody M. Aguiba)

Farming entrepreneurs asked govt to allocate budget for palay buying in Central Luzon

Farmer-entrepreneur Simeon T. Sioson

Farming entrepreneurs asked govt to allocate budget for palay buying in Central Luzon

May 28, 2019

For any questions or interview requests, please contact 0929-715-8669, 0917-102-6734 (Growth Publishing for PCAFI)

Farmer-entrepreneurs have asked government to allocate budget for the purchase of palay in Central Luzon as it is the farmers that have extended credit to DA for a buyer’s credit, rather than government lending to farmers.

   Rather than the Department of Agriculture (DA) lending to farmers, it is farmers from the Federation of Central Luzon Farmers Cooperative (FCLFC) that have extended supply credit to government because DA’s National Food Authority (NFA) apparently does not have the budget for buying already sold palay (husked rice).

   In a letter to DA Secretary Emmanuel F. Pinol last May 20, FCLFC asked for an adequate and uninterrupted funding for NFA.

   “Magalang po naming hinihiling sa inyong tanggapan na mapagkalooban ng sapat at tuloy tuloy na pondo ang NFA Bulacan . (We kindly request you to grant sufficient and continuous funding for NFA Bulacan),” said FCLFC Chairman Simeon T. Sioson.

   NFA has owed farmers for the purchased palay even before the May 13 national elections.

   Sioson also said in a forum led by Philippine Chamber of Agriculture & Food Inc (PCAFI) President DAnilo V. Fausto that farmers are already losing significantly from the decline in palay price since the ratification of the Rice Tariffication Act (RTA).

   Palay’s farmgate price in some parts of Central Luzon had already dropped to P11 to P13 or even P10 per kilo since RTA, Sioson said.

   This brings farmers a loss of P5  to per kilo from the price of P18-P19 per kilo prior to RTA passage.

   Fausto said that with the RTA’s Rice Competitiveness Enhancement Fund (RCEF), government should be able to strengthen credit to farmers – meeting whatever financing need to help them upgrade into becoming entrepreneurs.

  PCAFI President Danilo V. Fausto

RCEF allocates P1 billion yearly for six years for a credit program to farmers called “Expanded Rice Credit Assistance” (ERCA).

   ERCA fund will be equally managed by Land Bank of the Philippines and Development Bank of the Philippines. 

   It bears “minimal interest and with minimum collateral requirements.”

   Fausto said the credit should be an integrated facility not only for financing rice farming, but agriculture-related activities that will raise farmers’ income and add value to their produce. It should include financing for livestock, poultry, and farming of fruits and vegetables.

   In boosting credit supply to the agriculture sector in order to maximize its contribution to economic development,

   Fausto said PCAFI is also urging government to strengthen implementation of the Bangko Sentral ng PIlipinas’s Agricultural Value Chain Financing (AVCF) Program.

   Sioson said Central Luzon farmers are experiencing difficulty selling their entire rice produce to NFA.

   “Nung ang bigas nasa 14.4 % moisture content, nireject nila kasi i-dry muna raw.  Nung ibinalik namin at less than 10% ang moisture content, ni reject rin kasi overdried raw.  (NFA rejected our rice (unhusked rice) when it was at 14.4% moisture content. So we dried it first.  But when we returned at less than 10% moisture content, NFA also rejected it saying it’s overdried,” said Simeon.

   Ironically NFA traditionally imports rice from Thailand and Vietnam whose quality has been mired with controversy due to pests (bukbok) infecting the imported rice due to their old stock nature.

   “Ano ba kaibahan ng bigas na may bukbok na inisprayan ng insecticide na ini-import ng NFA dun sa mga palay ng magsasaka na di raw katanggap-tanggap.  Kahit lugi kami ng P5 sa palay ok lang, pero bukbok at overdried, that’s unfair.” 

   (What’s the difference between NFA’s imported, pest-laden, and insecticide-sprayed rice from the rice produce of Filipino farmers that are said to be unacceptable? Even if we lose P5 per kilo from farmgate, that’s just ok.  But to say that our rice should be rejected because it’s overdried, that’s unfair.).

   Roger Navarro of the Phil. Maize Federation Inc  during the PCAFI meeting that the same rejection in post harvest-related activities in corn has been experienced by farmers with NFA.

   “NFA should rather adjust pricing, whether it’s at 14% moisture content or should compensate farmers with any equitable pay for drying instead of asking farmers to return their produce home,” said Navarro.

   “Since NFA has its own drying facility, it should rather dry the ones with higher moisture so farmers will already be assisted in the sale of the grain.”(Growth Publishing for PCAFI)

Rice Tariffication pours tons of poor quality, pesticide-sprayed imported rice to Ph, stripped P95B income of Filipino farmers

May 24, 2019

The private sector expressed fear the Rice Tariffication Act will pour tons of poor quality, pesticide-sprayed imported rice and has so far stripped away P95 billion in income to Filipino farmers at a P5 per kilo farmgate loss.

   Companies participating in a dialogue of the Philippine Chamber of Agriculture & Food Inc. (PCAFI) with Department of Agriculture Undersecretary Ariel T Cayanan disclosed the present reality of previous fears prior to RTA ratification.

   “Before importation was only for buffer stocking.  But now, importation is the rule.  It becomes a permanent solution to the rice shortage.  Rice from Thailand and Vietnam is not as good as local rice,” said an entrepreneur of Chen Yi Agventures which built Visayas’s most modern rice complex in Alang Alang, Leyte.

   “We produce local rice; we do not mix with imports.  It’s entirely good– much better quality than imported.  But their rice has long been stocked in the warehouse, shipped for some time, and stocked again in local warehouses.  Their rice is sprayed with pesticides because of bukbok (pests) and  with artificial fragrance because it smells old.”

   Frisco M. Malabanan, SL Agritech Corp. rice consultant, said at the prevailing price of palay (rice husk) at farmgate which declined by around P5 per kilo, Filipino farmers are deprived with as much as P95 billion in income. 

   It is based on the country’s local palay production of 19 million metric tons.

Dr. Frisco M. Malabanan

Palay’s farmgate price in some parts of Central Luzon had already dropped to P11 to P13 or even P10 per kilo since RTA, according to Federation of Central Luzon Farmers’ Cooperatives (FCLFC) Chairman Simeon Sioson. 

   This is from the previous P17 to P20 per kilo at farmgate.

   In the market, imported rice looks new, shiny, fragrant (because of the pandan flavour spray) and nice as some of them appear to be whole grains and not broken rice (at times due to mixture with local rice).

   But indeed, these are the poorest of all rice as Philippines imports the cheaper, broken rice, according to the Chen Yi investor.

   Even the P10 billion Rice Competitiveness Enhancement Fund (RCEP) may not be effectively implemented.

   This is as DA had failed to raise many farmers’ living levels even despite the ACEF (Agriculture Competitiveness Enhancement Fund).

   PCAFI President Danilo V. Fausto said DA does not appear prepared (in technical, staff capability, administrative capability) to implement the P5 billion RCEP mechanization program.

PCAFI President Danilo V. Fausto

   PCAFI President Danilo V. Fausto said DA does not appear prepared (in technical, staff capability, administrative capability) to implement the P5 billion RCEP mechanization program.

   “As to the beneficiaries, how will you identify them? About 80% of cooperatives are non-compliant with CDA (Cooperatives Devt Authority) certification.  If you deal with them, you will be dealing with non-existent institutions,” said Fausto.

   DA-Philmech (Phil. Center for Postharvest Devt. & Mechanization) hardly has people and equipment to carry out distribution of P5 billion RCEF fund. 

   “Even Amtech (Agricultural Machinery Testing Evaluation Center)  under the University of the Philippines’ Los Banos is not capable of such supporting that huge task of testing machines to support the RCEP mechanization program,” said Fausto.

  He said machines should not be carelessly distributed to farmers if they do not have resources to at least maintain the machines – or these machines will just be sold or abandoned.

   This is much as the Philippine Carabao Center does not just give away buffaloes to farmers who do not have the resources (land, feeding/milking facilities, etc) to raise them well .

   Amtech is the agency tasked to test quality of imported machines.  However, even its legal mandate is questionable in order to support DA.

   Nevertheless, Cayanan, who represented DA Sec. Emmanuel F. Pinol during the PCAFI dialogue, said RCEF will tap resources of the DA Regional Field Units (RFO).  Initial beneficiaries will be farmers in irrigators’ associations.

   DA also started reviewing its beneficiary list after farmers’ benefit programs had been transferred from the Department of Social Welfare & Devt (DSWD) to DA due to the Napoles controversy, said Cayanan.

   Chen Yi was concerned the RTA will sidetrack government’s focus on modernizing local agriculture.

   “It will be very easy to get import permit. We’ll not work on productivity.   We’re putting food security at risk.  What happens if Thailand and Vietnam can longer supply us because they also have their own food security issues or if China or US will import more?  They can pay more money.”

   Chen Yi poured since 2014 a huge investment of P1.7 billion in an integrated rice complex in Alang Alang, Leyte in order to help uplift farmers from poverty after it was devastated by typhoon Yolanda.

   The company was since alarmed on the Philippines’ rice situation since the 2008 crisis caused the country to import more than one million metric tons with some volume reaching  a high price of $1,800 per metric ton.

   With the financing of Land Bank of the Philippines,  Chen Yi put up the rice operation engaged in growing seeds, planting rice, harvest, drying and processing, and distribution.  Its aim is to cut production cost from P14 per kilo to P6 per kilo to be competitive with Thailand and Vietnam.

   As to the training component of RCEP, Cayanan said Sec. Gen. Isidro Lapena (Technical Education & Skills Devt. Authority) committed to deploying trainers for farmers’ use of machines. (Growth Publishing for PCAFI)

DA Secretary Emmanuel F. Pinol with Chen Yi investors

Private rice sector pressed DA to partner with private enterprises in P10B rice fund implementation, buy farmers’ palay at all costs

Most modern integrated rice complex in Alang Alang, Leyte

May 23, 2019

For any questions or interview requests, please contact 0929-715-8669, 0917-1026734; Growth Publishing for PCAFI)

The private rice sector has pressed the Department of Agriculture (DA) to partner with private enterprises on the implementation of the P10 billion Rice Fund and to unequivocally buy farmers’ palay as a commitment to local rice industry despite liberalization.

   Enterprises participating under a Philippine Chamber of Agriculture & Food Inc. (PCAFI) forum asserted the private sector’s role in the effective implementation of the Rice Competitiveness Enhancement Fund (RCEF) as government may fail to properly implement it.

   In a PCAFI dialogue with DA Undersecretary (Operations) Ariel T. Cayanan,  Chen Yi Agventures, a company that built the most modern rice processing plant in Alang Alang, Leyte. asked DA to allow participation in 4 subsectors of rice operations.

   These are mechanization, seeds distribution, lending and extension – where the private sector has expertise in.

   The Federation of Central Luzon Farmers’ Cooperatives (FCLFC) also pressed DA to buy farmers’ palay—at a price based on quality offered, rather than reject these as rice farmers had disappointedly experienced.

   The proposal of Chen Yi Agventures has been filed earlier with DA Secretary Emmanuel F. Pinol.

   “As one from the private sector, we’re very grateful for Secretary Pinol’s  help.  He loves our program. He said we will work together to help implement the Rice Fund,” said a Chen Yi Agventures entrepreneur. “Our proposal is with the DA. We discussed it at length with Secretary Pinol.  And it’s not a new dialogue.”

DA Secretary Emmanuel Pinol with Chen Yi Agventures investor  

Providing these services (seeds supply, mechanization, lending, training & extension) on a large scale to farmers needs private enterprise.

   “Implementation is something the government is not good at. But the private sector can teach farmers how to plant seeds and monitor these daily.  It can own and maintain the machines, and teach farmers how to use these,” said the Chen Yi entrepreneur.

   “Merely giving machines away to farmers is not the solution. The problem DA encountered is farmers just abandon or sell the machines because they don’t know how to use these.”

   Chen Yi stressed the importance of raising rice farmers’ productivity.

   “That rice price will go down due to the rice tariffication law is only one concern. The most basic question is not whether price will go down, but that the yield of farmers remains low.  Even if palay price goes up, farmers’ income is low.”

   “Their ability to get out of poverty is not dependent on price of rice, but on productivity. You think it’s not relevant, it’s very important.  Productivity is what the Rice Fund should address.”

   Chenyi put in P1.7 billion investment in a highly-mechanized, integrated rice plant in Leyte which uses the most advanced technology in Visayas and Mindanao. Its operation is from planting seeds to planting rice, harvesting,  drying-processing, and distribution.

   The program’s target is to lower production cost from P14 per kilo to P6 per kilo, competitive to Thailand and Vietnam.  That uplifts Filipino farmers out of poverty through a contract farming scheme.

   “We want Filipino farmers to experience how it is to have money in their hands. French farmers are so successful in making a lot of money. They have comfortable living because France is taking care of its farmers. Farming is abt food security,”  said Patrick Renucci, Chen Yi French investor, said earlier on national television.

   “France has changed its farming system a long time ago while the Philippines is so behind.  That’s why we believe we have to change how people are framing because food is so important.”

  PCAFI President Danilo V. Fausto said during the dialogue that DA has to beef up capability to implement RCEP considering the present limited budget and capable staff it has.

   DA-Philmech (Phil. Center for Postharvest Devt. & Mechanization) hardly has people and equipment to carry out distribution of P5 billion RCEF fund. 

   “Even Amtech (Agricultural Machinery Testing Evaluation Center)  under the University of the Philippines’ Los Banos is not capable of such supporting that huge task of testing machines to support the RCEP mechanization program,” said Fausto.

PCAFI President Danilo V. Fausto

   Amtech is the agency tasked to test quality of imported machines.  However, even its legal mandate is questionable in order to support DA.

   FCLFC Chairman Simeon T. Sioson also said during the PCAFI dialogue that poor rice farmers in Central Luzon have experienced several rejections from the DA-National Food Authority (NFA) when they sell their palay. 

   NFA had claimed that it buys farmers’ palay at a higher price when dried with a 14% moisture content, but still buy their produce if it’s not dried, only at a lower price.

   However, Sioson said, Central Luzon farmers were compelled to dry their palay after initial NFA rejections. However, when moisture content went below 12%, NFA also rejected them.

   It is unfair to poor Filipino rice farmers that NFA buys Vietnamese and Thai rice at whatever quality they’re in. 

   Even if these are old, long-stocked rice that need spraying for pesticide and bad smell, these are accepted by NFA, Sioson said, while rejecting newly-harvested rice from local farmers.

   Also, Sioson said government still owes farmers in Central Luzon payment for accepted palay—instead of lending to farmers.

Farmer-leader Simeon T. Sioson on Maunlad na Agrikultura

   “Magsasaka po kami ng San Miguel, Bulacan.  Hindi po kami nababayaran ng NFA mula sa mga palay na ibinenta naming. May mga recibo po kami—bago pa mag halalan.  Meron pa nga po na may 10 araw na ngayon, hindi pa nababayaran.  Sana po mabigyan ng sapat at tuloy tuloy na pondo sa Bulacan.” (Growth Publishing for PCAFI)


  1. DA Sec. Emmanuel Pinol with Chenyi Agventures investors
  2. Chenyi’s integrated rice processing complex, Alang Alang, Leyte
  3. PCAFI President Danilo V. Fausto
  4. Farmer-leader Simeon T. Sioson