DAVAO CITY, Philippines – Rice smuggling continues amid the government’s effort that even resulted in a congressional inquiry that led to identifying the supposed leaders of a syndicate involved in illegally importing rice into the country.
“We can never stop rice smuggling unless we are able to lower the cost of producing palay,” Agriculture Secretary Proceso Alcala said.
The production cost of palay is reportedly much higher than importing rice from other countries.
Alcala arrived here yesterday for the assessment meeting of the World Bank-assisted Mindanao Rural Development Program.
Alcala said that the only way to make rice smuggling no longer inviting for unscrupulous traders is to invest in irrigation system.
“We already have the technology and our only problem is the irrigation system,” Alcala said.
Government lost more than P10 billion in revenues due to rice smuggling in the past 10 years.
Alcala said the government is now considering an open bidding scheme under which bids from other governments and private sector entities would be entertained.
“This is one of the options being considered (by the government),” Alcala told reporters during the Philippines Economic Briefing in Pasay City yesterday.
The Philippines currently has rice procurement agreements with Vietnam and Cambodia.
Thailand has not yet renewed its supply agreement with the Philippines that expired on Dec. 31, 2013.
National Food Authority (NFA) chief of staff Dennis Arpia said Thailand’s parliament still has to legislate the renewal of its supply agreement with the Philippines.
Thailand is currently gripped in a political crisis, preventing the passage of many trade-related measures.
This comes at a time when the Southeast Asian nation is prepared to unload its excess rice stock at low prices.
Without renewing its supply agreement with the Philippines, Thailand cannot participate in the bidding for the supply of around 800,000 metric tons of rice for buffer stock this year.
Arpia said the NFA has already informed Thailand of the need to renew its procurement agreement.
The NFA council is expected to release the official notice for this year’s importation as soon as the dry season harvest figures are in.
An open bidding would allow any government and private sector entity to vie for rice supply rights to the Philippines.
“This mode of procurement may be done especially with a large volume involved,” said NFA spokesman Rex Estoperez.
In Cagayan de Oro City, the price per kilo of rice from the NFA has increased from last week’s P27 per kilo to this week’s P33.
Helen Fernandez, president of the Cogon Market Rice Retailers, said the increase is due to the better quality of rice.
She added the price of rice, both NFA and commercial, has been steadily increasing since last year.
Commercial rice sold in Cagayan de Oro come from Bukidnon where the price is from P1,880 to P1,900 per sack of 50 kilos.
When sold in the city the price per sack is marked from P1,950 to P2,010 because of trucking and other expenses.
Fernandez said the NFA has also decreased its allocation to the rice retailers.
She said they are now getting an allocation of only 35 sacks per week. In other places, the retailers get 100 sacks per retailer, she added.– With Czeriza Valencia, Gerry Lee-Gorit