Lorenzo mulls review of rice import plan for farmers

The Department of Agriculture (DA) may need to rethink the Farmers as Importers Program (FAI) of the National Food Authority (NFA).

Agriculture Secretary Luis Lorenzo Jr. said the policy of allowing farmers to import the country’s rice buffer stock has not been as successful as expected. In fact, it could derail the country’s rice production program, he added.

Under the FAI, each qualified farmer group is allowed to import 500 metric tons (MT) per quarter or a total of 400,000 MT this year, half of the earlier projected total imports of 800,000 MT. But so far, only 50,000 MT was brought in.

The government has been trying to train farmers so they could eventually take over the function of importing rice. "However, there may be other means of raising farmers income and productivity rather than just allowing them to import," said Lorenzo.

Lorenzo said that despite government’s good intentions, farmer groups are not prepared to take on such an endeavor.

"They are not yet capable at this time. If you can train people to do other things, that’s good. But even if you do your best and it doesn’t turn out well, then it may be wise to consider other alternatives."

The DA chief said allowing farmers to engage in rice trading could eventually endanger the country’s efforts to attain rice sufficiency.

Lorenzo pointed out the experience of Hawaii which failed in its attempt to shift from an agriculture economy to manufacturing and trade.

"It’s very dangerous. It happened in Hawaii. Years ago, Hawaii reduced agricultural activities and concentrated on other industries, what happened was that these efforts could not be sustained. Now, they cannot train and retrain farmers, and a lot of people are jobless that’s costing social welfare so much," he said.

Lorenzo said that aside from the farmer groups’ difficulty in raising financing for the rice imports, they also have little bargaining leverage when negotiating for more competitive prices because of the small rice import allocation of just 500 MT.

The FAI resulted from NFA’s plan to gradually wean itself away from rice import trading and allow the private sector to eventually take over this function.

"I believe it’s the right direction, that private sector should be in charge of the rice importation," Lorenzo said.

He cautioned however, that rice importation should not be a monopoly of current rice traders who have the financial muscle to engage in trading.

"Allowing a single private company or just a few to import may not presently be the right move since the local rice sector needs protection also from rice exporters," said Lorenzo.

Lorenzo said the NFA may soon take over the importation of the undelivered volume assigned to farmers in order to ensure that a comfortable 90-day buffer stock is maintained through the lean months from July to September.