Agriculture cooperatives appeal ban to engage in rice imports

MANILA, Philippines — The Department of Agriculture’s decision to ban cooperatives from importing rice will lessen market competition to the detriment of consumers as the Cooperative Development Authority (CDA) maintained that such  a move is unjust and discriminatory.

In a position paper, CDA chairman Orlando Ravanera has opposed DA’s order to suspend the issuance of sanitary and phytosanitary import clearances to farmer cooperatives and associations (FCAs) following continued prodding from senators.

“This action would affect the legitimate cooperative rice importers who are compliant with all the rules and regulations set forth to regulate the importation activities and in turn, this would adversely affect their economic activity and more importantly, reduce their capability of improving their cooperatives’ financial status,” Ravanera said.

“The DA’s action, while temporary, would still be discriminatory especially against medium and large coops that have sufficient capitalization and possess the necessary facilities to venture into rice importation,” he said.

The Rice Tariffication Law removed import licensing requirements and virtually allowed anybody, including those not previously engaged in the rice business, to import rice.

However, the deluge of rice imports has been pulling farmgate prices down and the DA and even lawmakers blame this on unscrupulous traders using coops as dummies to import more rice.

Ravanera maintained that unscrupulous importers should be punished and the blame should not be against the coops.

He argued that removing the right of coops to import rice would lessen the market competition, especially in the provinces, as consumers would have no choice but to buy from retailers being supplied by traders at higher prices.

“It will not really help our farmers as even if they impose a total ban for coops to engage in importation, the demand remains the same and the market players are reduced to the traders who, in the first place, according to the claims of the DA are the ones using some of the coops in their profit-motive,” Ravanera said.

“Without the coops, the traders will have the tendency to monopolize the market and in turn it would further worsen the price of rice and further push down the price of palay (unhusked rice),” he said.

Instead of a total ban, CDA suggested a radical overhaul on rice importation to determine whether coops are capable of importing rice.

“We believe that farmer coops should be empowered to become agripreneurs capable of venturing into legitimate importation of rice in the country,” Ravanera said.