Smuggling saving us from food shortages

The previous column was about cigarette smuggling; this one is about food smuggling.

You have read and heard media reports about the smuggling of sugar, vegetables, rice and frozen meat. Only the other day, smuggled frozen pork—which the Department of Health said may be contaminated—were seized from vendors in a wet market. There have been many reports in the past of the Bureau of Customs (BOC) seizing smuggled sugar, rice, garlic, onions, carrots, broccoli and other vegetables. The other day, the Bureau of Fisheries and Aquatic Resources and the Department of Trade and Industry recommended the importation of fish for a few months to allow our fish stocks to recover. Fish caught locally are dwindling because of overfishing, and baby fish do not grow big enough to spawn before they are caught.

Fishermen protested because the imported fish would compete with their catch and prices would go down. Very soon, there would also be smuggling of fish because of the shortage of supply. The same is true with vegetable growers and livestock raisers who complain that smuggled vegetables and meat depress the prices in the market. Smugglers can sell their goods at lower prices because they don’t pay tariff and taxes.

The sad truth is that food smuggling is saving us from food shortages. Last Dec. 8, in the Food and Agri-Business Conference sponsored by the University of Asia and the Pacific, various speakers made a shocking revelation: smuggling is what is saving our food security from imminent shortages.

Speakers representing the rice, sugar, meat, fish and vegetable sectors noted the high levels of commodity smuggling which, although illegal, somehow mitigates food shortages in many parts of the country.

Except for Lito Banayo, administrator of the National Food Authority (NFA), who is in charge of stabilizing rice and corn supply and prices, all the other speakers came from the private sector.

An academician who was in the audience was aghast when she noted a common thread in the revelations of the speakers: the huge volume of smuggling of vegetables, meat, sugar and rice. So much so that the moderator, Dr. Rolando Dy, a highly regarded economist specializing in agricultural concerns, concluded that smuggling seems to be actually saving the Philippines from food price increases and even actual shortages.

We all know that smuggling is an age-old illegal practice that cannot seem to be stopped, with successive administrations promising, but failing, to rid the BOC of corrupt employees and fixers. We hope that the newly installed leadership at the BOC can make a difference. It’s a scary thought that our food security is dependent on smuggling.

The head of the Sugar Master Plan Foundation, a certain Mr. Monasterio, lamented the low farm-gate prices of sugar, even if we all know that we are no longer producing as much sugar as in the old days. But because artificial sweeteners and the so-called “pre-mix” products enter the ports willy-nilly, over and above refined sugar that enters the ports of Cebu, General Santos and Cagayan de Oro, prices which reached more than P2,000 per 50 kilograms have dropped to as low as P1,200.

The smuggling of garlic, onions, carrots, broccoli and other vegetables is also killing our local growers just as hog and cattle raisers are being put out of business by the proliferation of imported frozen meat.

Banayo, the only government official among the speakers, admitted that rice in container vans is shipped to the country even without NFA import permits. Despite a memorandum of agreement where the NFA and BOC are supposed to coordinate in keeping rice volumes in check, smuggling continues.

Under our laws, only the NFA can import rice to protect our rice growers. In the past several years, the NFA has been encouraging the private sector to finance the importation of rice to prevent local shortages by issuing the so-called “import permits,” virtually lending the NFA monopoly to rice traders and farm cooperatives to bring in limited volumes of rice, just enough to prevent a shortage.

Last year, the NFA raised private sector participation, principally because of lack of funds. Still, smuggling of rice in container vans continues in the ports of Cebu, Cagayan de Oro, General Santos, Davao and Zamboanga. Why not in the ports of Manila and the nearby ports of Batangas and Subic? Maybe because there would be many witnesses and government agencies are headquartered there.

But rice and sugar are bulky commodities, so how can they be smuggled in southern ports unless there is collusion with Customs personnel in these ports?

In previous years, over and above the massive importations by the Arroyo administration, smugglers still found it profitable to import rice at low prices and sell at huge profits. But what happens when prices go sky-high, as in 2008, which food experts keep warning may happen in the near future because of climate change (which affects crop production) and increasing demand due to the ballooning populations in the world?

The question is: When smuggling becomes unprofitable, will our food security be endangered? Are we ready to accept that smuggling has kept our food supply stable? Will we ever be self-sufficient in rice?

These are issues that the Aquino administration has to address. The Bureau of Agricultural Statistics reported that poor Filipinos are eating more rice to save on viands such as meat and fish. That makes the rice smugglers happy, but what happens to the Filipino rice farmer?

We already have a geriatric farmer profile. Children of farmers leave the family farms to look for jobs in the cities and abroad, and their farmer-parents even encourage them to do so. What then is the future of our food security?