Farmer groups ‘top rice importers’–are they?

In File Photo: The National Food Authority (NFA) stores its buffer rice stock consisting of imports and paddy it purchased from farmers in its warehouses.

COOPERATIVES, irrigators’ associations and farmers’ groups continue to edge out corporations and other private entities in rice importation, bringing in over 970,000 metric tons since the industry was liberalized.

Bureau of Plant Industry (BPI) data showed that 118 cooperatives, including farmer-run ones, and irrigators’ associations have imported 971,192.51 MT of rice from March 5 to October 30.

The volume was more than half or about 57.33 percent of the total 1.693 MMT imported rice quantity during the reference period.

The volume imported by farmers cooperatives and irrigators’ associations was 248,493.88 MT higher than the 722,698.64 MT imported by corporations, traders and other private entities, BPI data showed.

BPI records showed that the cooperatives and irrigators’ association used 1,055 sanitary and phytosanitary import clearances (SPSIC) to import rice.

Farmers’ cooperatives and irrigators association accounted for more than half of the 209 total entities that imported rice during the reference period, according to BPI data.

The BusinessMirror earlier reported that farmers cooperatives and irrigators associations have been more active in importing rice after the industry was liberalized and deregulated by Repubic Act 11203, or rice trade liberalization (RTL) law. (Read related Broader Look https://businessmirror.com.ph/2019/10/31/pre-and-post-rice-trade-liberalization-law-big-traders-gaming-farmer-groups/)


Dummies of big traders?

However, BusinessMirror sources said that many of these farmers groups do not have the capacity to import and are just “dummies” for Metro Manila-based traders—an allegation that seems to be borne out by data indicating an incongruity between the groups’ meager financial capacity and the enormous resources necessary for their huge importations.

Renato Cruz, not his real name, said there are over 20 cooperatives who import rice in his province. However, many of them not only lack the funds to import large volumes of rice, but also do not own warehouses that can be used to store their purchases.

Securities and Exchange Commission (SEC) documents obtained by the BusinessMirror showed a glaring discrepancy between the financial capacity of some irrigators associations and the amount of rice they are importing.

For example, Pampanga-based Macagatal Irrigators Association Inc. imported 3,000 MT of rice from March 5 to October 30 —worth about P52.5 million based on the BusinessMirror’s computation at an average cost of $350 per MT.

Based on documents submitted by Macagatal to the SEC, the group only had a cash a balance of P1,300 at the end of 2018. Macagatal reported a revenue or gross income of P16,000 last year.

BPI data showed that Macagatal has applied to import 8,000 MT, which could be valued at about P140 million, since the rice industry was liberalized.

Another group, Saint Vincent Salapungan Farmers Association Inc., with a declared cash balance at end-2018 of P1,500, has imported 2,080 MT of rice—which could be worth about P37.856 million—since March 5.

Caniogan Balbalay Kali a Lakay Irrigators Association Inc., with a declared cash balance of P1,300 and net income of P800 last year, has imported 17,628 MT of rice from March 5 to October 30. At an average unit cost of $350 per MT, Caniogan has already imported at least P300 million worth of rice.

Government scrutiny

The government has started scrutinizing rice importation players, including farmers’ cooperatives, as authorities seek to fully realize the benefits of the RTL law.

High-ranking officials interviewed by the BusinessMirror disclosed that parallel investigations have been launched by different agencies to ensure the proper implementation of the RTL law.

The investigations are concerned about the proper rice tariff collection, correct tax remittance, possible collusion between unscrupulous traders and cooperatives, and competition issues in the rice industry, among others.

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