Flood of imports

Local producers won’t like it, but it looks like in the near future, there will be a flood of imported agricultural commodities.

This has become even more certain following the continuing increase in the inflation rate, defying projections of the government economic team that it had already peaked in January (after their hopeful projections that it would peak in December).

Bangko Sentral ng Pilipinas Governor Felipe Medalla said BBM’s economic team is moving to ensure the importation of other commodities soon, to temper inflation.

Medalla told this to “The Chiefs” on One News last Monday, a day before it was reported that instead of softening in February as projected by the economic team, inflation likely went up further. And again, high food prices drove the uptick.

Instead of controlled importation, it looks like Marcos 2.0 is leaning toward open importation with tariffication, as in the case of rice, whose supply and prices have become largely stable.

This means allowing market forces to dictate timing and volume of imports, instead of regulated importation based on unreliable or non-existent data on inventories and projected volumes of production of specific agricultural commodities.

Certain agricultural players stand to lose the protectionist policies they have long enjoyed, with the support of politicians. But President Marcos’ economic team appears to be leaning in the direction of the previous administration’s approach to stabilizing rice supply and prices: the overriding concern must be the welfare of the majority. That means consumers who account for about 90 percent of the population, over the farmers / producers.

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Farmers have complained that the promised assistance to boost domestic rice production, to be sourced from the tariffs collected for the Rice Competitiveness Enhancement Fund (RCEF), is not reaching the majority of farmers.

Tariffication proponents insist that this is not the case, and that the benefits from RCEF, including new farm machinery, are being distributed and felt.

Since there is no reliable data gathering in the agriculture sector, this is another case of he said, she said.

The domestic rice industry could already be in the ICU. But consumers have no complaints; the long, snaking lines for limited rice purchases have become a thing of the pre-pandemic past.

What seems to be foremost in the mind of Marcos Junior is that runaway inflation especially when food-driven causes deep public discontent, which is bad news for politics and governance.

Prices go down when there is ample supply. Since domestic production is not meeting the demand, the quickest response is to source the supply from abroad.

If this is going to be the policy of Marcos 2.0, it must get its importation process in order.

The latest importation of 440,000 metric tons of refined sugar is threatening to be a repeat of the import fiasco at the start of BBM’s presidency, which led to the suspension of Agriculture Undersecretary Leocadio Sebastian followed by the resignation of BBM’s “little president,” Vic Rodriguez.

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Opponents of importation have decried the arrival of the imports ahead of the release of the official order by the Sugar Regulatory Administration (SRA), bypassing the normal process.

Critics are asking if Sebastian’s replacement, Domingo Panganiban, who greenlighted the importation without going through the SRA, acted alone or had the blessings of his immediate superior, concurrent Agriculture Secretary Ferdinand Marcos Jr.

Panganiban has echoed Sebastian’s explanation last year, saying the urgency of the situation justified speeding up the import process.

Malacañang has said the importation is aboveboard, and so far, BBM has not contradicted it or gone for the head of Panganiban.

Ordinary folks can’t care less whose head will be next on the chopping block. The only concern is when sugar prices will come down.

The large supermarket chains that committed to sell one million kilos each of their repacked house brands for P70 a kilo (limited to three kilos per single transaction) must have run out of the subsidized items a long time ago. Last Sunday at a branch of one of the chains, I bought five kilos of the house brand for P105 a kilo.

It’s worse in another chain notorious for the biggest mark-ups, where one brand of white sugar remains priced at P138 a kilo.

There must be a way for the government to check and cap the mark-ups of sugar industry players after the farm gate. Producers insist that farm gate prices do not justify current retail prices.

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While fixing the import process, which shouldn’t require rocket science, the government must move more aggressively to boost domestic agricultural production, beginning with basic commodities including rice, sugar, onions, salt, and now native garlic, whose biggest source in this country is BBM’s home region, Ilocos.

For the first time since I began buying Ilocos garlic from a wholesaler in Divisoria many years ago, the owner didn’t have the pungent local bulb in stock when I dropped by last week.

The harvest had not yet sufficiently dried, she told me, and because supply was limited, the price offered to her was sky-high at over P300 a kilo.

I was forced to settle for the large but bland imported garlic from Taiwan, at just P80 a kilo. Better than nothing, she said. I also got Ilocos shallots for P220 a kilo; the price was low enough, she said, and she wouldn’t give a discount of even P1 to a fellow Tsinoy.

In other wet markets in Metro Manila, red onion prices have softened to P180 to P240 a kilo depending on the quality, from December’s eye-watering high of P650 to P700.

White and yellow onions have also reappeared, although prices are still steep at up to P320 a kilo.

While the imported garlic is inexpensive, it would be a shame to see the native garlic, which is of superior quality, go the way of local salt.

Reliance on imports to stabilize supply and prices of our basic agricultural needs can create an unhealthy dependence that in the long run will threaten our food security.

Local producers are told by import proponents that in a globalized economy, they cannot enjoy government protection forever. Sooner or later, they are told, they will have to confront global competition, modernize and boost efficiency. Reform or perish. Sink or swim.

The major players can probably do this. But those in the margins will need all the help they can get.