Crackdown on rice smuggling to benefit farmers

MANILA, Philippines - Putting an end to rice smuggling would directly benefit at least 18,391 farmers, and millions of poor consumers who would have more to buy from the National Food Authority at the current price of P27 per kilo as against the prevailing annual average retail price of P36.74 for the regular milled.

This assessment was made by Agriculture Secretary Proceso J. Alcala in endorsing to the Senate the position of the NFA against rice smuggling.

In a letter to Senate Agriculture and Food Committee chair Cynthia Villar, Alcala said that the P8 billion funds lost to smuggling yearly could be given to the NFA for the procurement of an additional 459,770 metric tons from 18,391 individual farmers at the current buying price of P17.40/kg inclusive of incentive, enabling them to benefit from the P2.7 million net profit.

Consumers would also gain net savings of some P2.9 billion from the consequently more affordable and available NFA rice at P27/kg compared to the retail market’s P36.75/kg annual average price.

At the same time, the NFA would realize interest savings of about P380 million, if it would borrow the P8 billion.

The country reportedly lost between P8.4 billion to P10 billion in forgone revenues in 2012 due to rampant rice smuggling involving some 800,000 to one million metric tons.

The amount was assessed from the base rate of P21/kilo of rice and the current duty of 50 percent for imported rice without a permit from the NFA.

This development stemmed from the Senate inquiry into rice smuggling allegedly perpetrated and controlled by suspected “rice smuggling king” Davidson Bangayan alias David Tan.

Bangayan was pinpointed by Davao City Mayor Rodrigo Duterte as the one in control of rice smuggling nationwide.

“His (Bangayan’s) face is all over town. Everybody knows him. He is a central figure in rice smuggling in this country. Anyone who wants to import rice, they go to David Tan. He has the line to Customs. He has a line to everyone. He is the real financier.  So everybody who wants to import rice will have to go to him.   He has the stranglehold (on rice importation). That’s why his name keeps surfacing – David Tan, David Tan. There are three David Tans. He is the only one. He is the central figure. Everyone, here in Manila, maybe Davao, if you want to go into the rice business, you go to him. You pay,” Duterte said.