Farm sector lays out agenda to halt smuggling for next gov’t

  • 21 March 2016, Monday

Source: BusinessWorld
9 Mar 2016

FARMERS’ groups said they want the next president to stem the illicit flow of agricultural commodities into the country via new laws and a firmer grip on agencies involved in commodity importation.

In a text message to BusinessWorld, Samahang Industriya ng Agrikultura (SINAG) President Rosendo O. So said that the organization estimates that based on market prices, smuggled agricultural goods amounted to P190 billion to P200 billion since 2010.

SINAG is the umbrella group composed of 33 farmers’ and irrigators’ associations.

According to Mr. So, with the average tariff of agricultural products at 35%, this equates to annual losses of the government of between P8 billion to P10 billion.

Mr. So also cited a study by the Southeast Asian Regional Center for Graduate Study and Research in Agriculture which showed that between 1986 to 2009, annual trade in smuggling agricultural goods in the Philippines was about $10 billion.

For his part, Francisco U. Collado, president of the onion grower’s group Sibuyas ng Pilipino Ating Alagaan, said that the next president should more closely monitor the agencies involved in the importing process to minimize corruption and smuggling.

“The government is losing huge amounts [of money], affecting farmers’ livelihood and jeopardizing the population’s health,” Mr. Collado said in a text message to BusinessWorld.

The government-funded SEARCA study ranked onion, amounting to $259.55 million in 23 years since 1986, as the fourth-biggest smuggled commodity.

In a phone interview, executive vice-president of the P4MP and president of the Pangasinan Federation of Irrigators’ Associations Oftociano M. Manalo, Jr. said that smuggled rice is available in “almost all markets” in Pangasinan.

According to Mr. Manalo, smuggled rice in Pangasinan is sold at about P27 per kilo, lower than the local equivalent and even the rice available from the National Food Authority, which are worth about P30 to P40 per kilo. High-quality domestic rice can fetch up to P45 per kilo.

Mr. Manalo also proposed that the law be revised to permit third parties from the private sector be involved in Customs inspections at seaports.

In addition, Mr. Manalo wants the passage of House Bill No. 6380 or the Anti-Agriculture Product Smuggling Act which will impose higher penalties on smugglers.

The bill, if approved, will punish smugglers with life imprisonment and a fine of twice the fair value of the smuggled agricultural product and the aggregate amount of taxes, duties and other charges legally due on the shipment.

For more than five hectares of land, Mr. Manalo said cost of producing rice is about P10.50 per kilo, which he said is not competitive with neighboring countries such as Vietnam and Thailand where cost is pegged P5.50-P6.50 per kilo.

Meanwhile, sugar, the second-most smuggled food item according to the SEARCA study, remains susceptible to corrupt importation due to the nature of Customs procedures, an association official said.

Executive director of the Philippine Millers’ Association Francisco D. Varua said “There is too much human interaction in the Bureau of Customs (BoC) operations leading to corruption.”

The Customs Code, Mr. Varua suggested, should allow other stakeholders to file charges against smugglers.

According to Mr. Varua, there have been discrepancies between the trade data of Thailand and official or unofficial Philippine data.

“Sometimes, we also notice a reduction of withdrawals from mill and refinery warehouses which cannot be attributed to normal market behavior,” Mr. Varua added.

When asked to compare locally produced sugar with its smuggled counterpart, Mr. Varua said that subsidized sugar smuggled from Thailand costs about $0.14 per pound, compared to $0.18 for local sugar.

The BoC, Mr. Varua added, should implement pre-shipment inspection or inspection of cargo at the country of origin, possibly implemented via a public-private partnership.

For his part, the Sugar Alliance of the Philippines president Manuel R. Lamata noted that negotiations with the BoC are making some progress on the issue of outside observers monitoring imports.

In October, Customs Commissioner Alberto D. Lina issued Joint Memorandum Order No. 4-2002 deputizing representatives from the Sugar Regulatory Administration and the Sugar Anti-Smuggling Office (SASO), authorizing their entry into ports to monitor arriving shipments.

Mr. Lamata, however, requested that the SASO be placed under the Office of the President in order to be directly supervised and controlled by the chief executive himself.

On the heels of calls by SINAG to stage a five-day “pork holiday,” Mr. So said that talks with the government on restricting illicit entry of smuggling goods, focusing on livestock products, has not yielded significant results.

“After five years of negotiating with the DA (Department of Agriculture) and the four successive Commissioners of the BoC, the results of dialogue and consultations are back to zero,” said Mr. So in an e-mail to reporters last week.

Currently, prices of pork are at P85-P90 per kilo, almost the same as hog farmers’ cost of production.

According to Mr. So, backyard hog raisers were relying on a strong Christmas, which typically comes with high demand for ham and festive dishes like lechon.

“But that did not happen,” Mr. So said, as smuggled imported meat is directly competing with products from the wet market where backyard and commercial farmers trade, at a price advantage of about P30-P40 per kilo.

Mr. So said that imported frozen meat should be directed to processors or groceries where refrigeration, which is necessary for preservation of chilled meat, is available.

SINAG is also asking the next president to implement the Republic Act No. 10611 or the Food Safety Act of 2013, particularly regulations on quarantine inspection and labeling policies.

In addition, to ensure stringent quarantine procedures, SINAG wants the BoC to designate a quarantine area “for the unloading of all containers and the conduct of 100% quarantine and inspection services of all pork/meat imports with declared 5%-10% tariff.”