AO 20: A permanent solution?

Last week (April 18), in behalf of President Ferdinand Marcos Jr., Executive Secretary Lucas Bersamin signed Administrative Order 20 (AO 20) directing the Department of Agriculture (DA) “to remove non-tariff barriers to bring down rising domestic prices of agricultural products.”

Non-tariff barriers include, among others, quotas, embargoes, sanctions and levies. The reason could be political or economic. A sanction or trade embargo is a political strategy. On the other hand, if a country imposes quotas or levies on imports of products or produce to protect their own manufacturers or producers, that is an economic strategy.

The sanctions and trade embargoes imposed on Russia (like the prohibition of importing equipment, parts or supplies for use of its armed forces in connection with its war against Ukraine) is a political strategy. On the other hand, in trying to understand its use as an economic strategy, we need not go that far. Protecting our farmers or fisherfolks from the influx of imported rice, fish and other agriculture products that our country produces is a typical example of its use as an economic strategy. We can’t afford to see them (farmers and fisherfolks) lose their livelihood and render their laborers jobless. Obviously, the entire agriculture sector will suffer. Thus, resulting to economic losses.

So that, when a government removes such protection, there must be some compelling reasons. In us, faulted on the drought, inflation (due to food supply shortage) has been made the underlying reason for it. As usual, importation is the first option, the immediate default.

Thus, Pres. Marcos said, that “It is imperative to further streamline administrative procedures to foster transparency and predictability of policies on the importation of agricultural products in order to help ensure food security, maintain sufficient supply of agricultural goods in the domestic market, and improve local production.”

Specifically, among others, the President “ordered the DA to simplify procedures and requirements in licensing importers, minimize the processing time of application for importation, and exempt licensed trades from submission of registration requirements in coordination with other agencies such as the Department of Trade and Industry and the Department of Finance.”  To also “facilitate the importation of certain agricultural products beyond the authorized Minimum Access Volume and reduce or remove administrative fees” and “ease the process of issuing Sanitary and Phytosanitary Import Clearance and find ways to improve logistics, transport, distribution and storage of imported agricultural products.”  Likewise, the Bureau of Customs (BoC) was “directed to prioritize the unloading and releasing of imported agricultural products.”

Given the current situation, we totally agree that the only option is importation. What is disturbing though is that, for decades, our country has made importation the immediate default for our food shortages. Have we given up hope on our agriculture sector?

Lest we forget, we established the Rice Competitiveness Enhancement Fund (RCEF) during Pres. Duterte’s term. It is “intended to improve the productivity and competitiveness of local rice farmers and increase their income through the provision of farm machinery and equipment, rice seed development, propagation, and promotion, expanded rice credit assistance, and rice extension services.”

Remarkably, there is emphasis in providing machineries and farm inputs. This is good because this country has an unpalatable history when doling out cash to farmers/beneficiaries.  There is a little caveat though. Remember, the law also extends credit assistance. With that, anything can go wrong. Moreover, there are also highly saleable farm inputs that can be easily converted to cash.

To make sure that these inputs are not sold or placed as bets when they (farmers/beneficiaries) find gambling as another preoccupation and/or credit assistance aren’t used to buy gadgets and appliances these must be closely supervised. Or, in the jargon of the banks, these must be considered supervised loans.

Since these are to be closely supervised, we need a battalion of agriculturists to guide them through. These agriculturists must be employed and under the strict supervision of the DA.  This is to make sure that LGU executives won’t dip their hands into the cookie jar. Nor can they claim credits for it and make these farmers/beneficiaries their perpetual parasites.

To ensure success, this government must also provide the necessary infrastructure, such as, farm to market roads, irrigation system, storage facilities, transport equipment, packing and processing facilities.

Not done well, AO 20 shall become a permanent solution.