Friday, 10 March 2000

Aiding livestock and poultry raisers at corn farmers’ expense
By Gina Mission


It was an easy decision to make. When Teodoro Minguito’s landlord offered P25,000 for him to transfer his family from the farm to the provincial capital, Minguito couldn’t have been happier. Accepting it would mean returning the farm to his landlord, but he was intending to leave it anyway to look for a job. His corn yield could no longer support his growing family of seven. It was an offer he couldn’t refuse. It would probably take him a lifetime to save that kind of money.

.....Unbeknown to Minguito, his landlord didn't give him money out of good will. He wanted to evade agrarian reform. To do that, he needed to get the tenant out of the land.

.....In 1997, with the windfall from his landlord, the trusting Minguito and his family left their home in Cabayawa, Tubay, Agusan del Norte, for Butuan City, the provincial capital. To save money, they decided to stay with his married sister who lived in the city until he could find a job. After three months, however, he couldn’t find one. His money had run out, too. He wanted to go back to his farm, but it was too late; the landlord had already mortgaged the land Minguito used to till.

.....Minguito’s situation–being landless, jobless, and penniless—is what the staff of the Philippine Peasant Institute (PPI) fear will happen to many other corn farmers if the proposal of the Department of Agriculture to increase the country’s "minimum access volume" (MAV) for corn importation is approved by Congress. Under the rules of the General Agreement on Tariffs and Trade (GATT), the MAV is the minimum quantity of a particular product the country can import from other countries at a certain tariff rate.

.....Jowen Berber, the peasant institute’s policy advocacy officer, said increasing the MAV for corn would not only compromise the produce of corn farmers, but also make them vulnerable to predatory practices by other people.

.....She explained that increasing the MAV would bring in cheaper corn, and nobody would want to buy the higher-priced corn produced by local farmers. She said PPI had come across numerous cases where farmers abandoned their farms, or sold them to scheming individuals, and looked for jobs in cities and big towns for a more stable source of income, as Minguito did.

.....From the present MAV of 173,550 metric tons of corn, the agriculture department, invoking an impending corn shortage, wants to increase the figure to 324,550 MT, or by 151,000 MT.

.....In early February, the agriculture department, through the Bureau of Agricultural Statistics, projected a corn shortage of 2.004 million MT for the first six months of the year. To offset the shortage, the department wanted to increase the corn importation this year. On February 29, it submitted a proposal to that effect to Congress, which has 15 days to act on it. If it fails to act within that period, the proposal will be considered approved and the importation will be pushed through.

.....Berber said farmers are wondering why there should be a shortage this year when last year’s production of 2.09 MT was considered a glut and this year’s projected production of 2.004 MT is only slightly smaller. "If last year’s 2.09 million MT resulted in a corn glut, shouldn’t this year’s projected yield of 2.004 million MT be enough to meet the demand?" she asked.

.....Explaining the need for a bigger corn import, the President said in a letter to the House Committee on Agriculture: "There is an urgent need to alleviate such a shortfall to enable the livestock and poultry industries to produce meat and meat products at prices affordable to consumers."

.....Granting that there will indeed be a corn shortage this year, and that the President is sincere in his desire to help the livestock and poultry industries, the PPI officer asked why this is being done at the farmers’ expense.

....."As the President, should he not protect everybody’s interest?" Berber asked.

.....PPI believes that the current proposal to increase the MAV for corn is skewed toward the interests of the end-users, or the poultry and livestock industries. "While the end-users can bat for higher MAV levels, the farmers cannot bat for a decrease," it said in a statement.

.....According to PPI, the livestock and poultry industries consume corn products at an annual average of 5 million MT. Increasing the present MAV, as proposed by the DA, would mean that the country can import more corn at the same tariff rate of 35 per cent. If Congress disapproves the proposal, however, the country will have to pay a tariff rate of 65 per cent whenever it wants to import more than the present MAV.

.....While the proposal will obviously result in cheaper corn prices, PPI believes it will cause a bigger problem.

....."In essence, such a move facilitates wiping out the corn industry," it said. This is because additional corn imports may further dampen local prices. Local corn produce, it argued, can never compete with imported corn.

.....Local corn production is not cheap, which prevents it from becoming competitive in the international market. PPI cited landlessness, the high cost of chemical inputs and lack of farm to-market transportation as the main barriers to competitive corn production by Filipino farmers.

.....Paying for the land's rent, the ever-increasing prices of fertilizers or pesticides, plus relatively high transportation costs, either due to lack of good roads or oil price increases--all these contribute to the uncompetitiveness of local corn.

.....PPI pointed out that increasing the MAV for corn could serve as a dangerous precedent for other agricultural products.

.....In a position paper against the proposal, PPI stressed: "For the government, the perennial policy problem is the livestock and poultry industries' access to affordable feeds or inputs. If the government persists in seeing just the symptom, it will forever be bound to its quick-fix solution: increasing the MAV. In the long run, the question is: will it really empower the livestock and poultry industries? Actually, there is no study presented yet on how the sector has fully maximized the scheme."

.....The PPI doesn’t think importing more corn will solve the problem of food security for farmers like Minguito, or help the poultry and livestock industries.

.....What the government must do, the Institute said, is review its policies for agriculture and rural infrastructure development. It should also look at issues such as land reform implementation and the capacity of the National Food Authority to influence prices for local corn, to help farmers at least survive, if not compete.

.....Most importantly, Berber said, the government, or even just the DA, should examine the plight of farmers like Minguito. Maybe then, it will be able to solve the problem of shortages, and not just through importation.