Hope for lower food prices

As expected, President Marcos’ latest decision to relax the rules on the importation of agricultural products is being opposed by traders and middlemen who have been unduly enriching themselves by buying low from farmers and fishermen and selling high to consumers.

The President has directed the Department of Agriculture (DA) to simplify its policies and procedures on the importation of farm products and remove other nontariff barriers that restrict or delay their entry to the country. These include quotas, import licensing schemes and bureaucratic regulations that have the net effect of increasing the cost of imports. Their removal or easing will therefore boost supply in local markets and ultimately bring down prices of essential farm products. It should be noted that this will not come at a loss to the government in terms of foregone revenues.

Under Administrative Order No. 20, signed by Executive Secretary Lucas Bersamin on April 18, the DA was directed to coordinate with the Department of Trade and Industry and the Department of Finance to streamline procedures and requirements in the licensing of importers, minimize the processing time of applications for importation, and exempt licensed traders from the submission of registration requirements.

Unscrupulous middlemen

The DA was also ordered to streamline procedures and requirements for the issuance of sanitary and phytosanitary import clearance, which needs to be released within 15 days, otherwise, applications with completed documents will be deemed approved. The Sugar Regulatory Administration was also told to simplify the importation of sugar by allowing direct purchases by the agency’s accredited importers and accepting more traders to participate. The DA was tasked to similarly review and revise guidelines on the importation of frozen fish and other marine products while the Bureau of Customs, where many complaints of delayed releases are raised by the private sector, was ordered to prioritize the unloading and release of imported agricultural products.

By addressing the delays that lead to additional costs for importers, the entry and availability of imported agricultural products will hopefully be timely and cover the supply shortages of farm products. However, the success of this order will depend in large part on the surveillance team created under AO 20. Made up of representatives from several departments and law enforcement agencies, it is hoped that the body will be able to pinpoint snags and other potential roadblocks early on and immediately find solutions to them. The team can also focus on unscrupulous middlemen who have often been blamed for the high prices of farm produce—even during times of abundant supply. Perhaps the President already had this in mind when he included the police and other law enforcement bodies in the surveillance team to go after these scalawags.

Reliance on imports

AO 20 is indeed a very timely measure that, if implemented correctly, could really help lower the prices of agricultural products. However, the implementation of AO 20 should go hand in hand with the timely implementation of the DA’s three-year plan for the country’s agricultural sector. The “Para sa Masaganang Bagong Pilipinas” program presented to the President last January outlines measures, many of them long-term, that will increase the productivity of the agriculture sector and eventually reduce the country’s reliance on imports. Part of this is the “data-driven information system” that the DA needs to develop to address shortages or even overproduction of agricultural products that often lead to wastage. Agriculture Secretary Francisco Tiu Laurel Jr. knows that special attention needs to be given to post-harvest facilities, the lack of which causes up to 15 percent of wastage in rice production that is equivalent to about 450,000 tons a year, or 23 days of rice supply for the whole nation. Another is the addition of more cold storage facilities to address the yearly problem of an oversupply of vegetables and fruits. For the long term, the DA needs to build a lot of infrastructure such as irrigation facilities, agro-industrial ports, and farm-to-market roads to address logistic problems, and water-collecting dams to prepare for the dry months.

Sweeping order

The President’s sweeping order to remove and address all issues hindering the timely entry of imported farm products, once implemented correctly and speedily, will redound to the benefit of the millions of hard-pressed consumers reeling from unnecessarily high prices of farm products. Groups opposing the measure can have a valid argument only if local farmers and fishermen can actually meet the shortages in supply that have caused prices to stay elevated. From the looks of it, this is unlikely, especially with the El Niño dry spell, which has already resulted in agricultural damage of P4.3 billion as of last week, and there’s still the summer month of May.