Wednesday, September 11, 2019

The country imports rice from Vietnam. Mindanao plans to export to Papua New Guinea. Here’s why.

The country imports rice from Vietnam. Mindanao plans to export to Papua New Guinea. Here’s why.
"Not a few called the idea of exporting "dumb" because they could not seem to understand"
The country imports rice from Vietnam. Mindanao plans to export to Papua New Guinea. Here’s why.
"Not a few called the idea of exporting "dumb" because they could not seem to understand "
It can be very perplexing that Mindanao plans to export our country’s local rice output amidst massive importation of rice here in the Philippines. Although all of these confusion can be reduced to the very fact that we can no more afford to sell our own produce, the reason behind it is a product of a complex situation, and we can just ask – why can’t we just sell, buy, and consume our own?

We need to understand first of all how reliant we are to rice production of our neighboring countries such as Vietnam and Thailand. In 2018 alone, we imported a total of 2,006,360 metric tons of rice from more than five countries, and it cost us around $869 million. That shouldn’t surprise you. What can be more astonishing is we doubled our rice import in just one year. In 2017, a total of around 888,000 metric tons of imported rice has been recorded. For 2019, Philippine Star reported we are approaching 3-million metric tons of rice import.



Rice is the primary staple of and most widely grown crop in the Philippines, and some say that our local produce couldn’t sustain the demand of rice consumption. That seemed not real. We are actually producing more than we consume. According to BusinessMirror, it was forecast that Filipinos could have consumed 12.9 million metric tons of rice last 2018. Philippine Statistics Authority revealed we did produce around 19.07 million metric tons of rice in the same year. So where’s the need to import?

Well, here where the pricing theory came in.

Data from Philippine Statistics Authority shows average retail price of local rice is P44.99 per kilo in 2018, and compare it to P37.00 per kilo of rice imported from other countries (data from National Food Authority), our local farmers suffer. The pricing can be blamed to high rice-inflation and our local farmer’s inability to compete with neighboring countries’ low-cost rice production after Rice Tariffication Law has been implemented. Another culprit in the high price of local retail rice is the magician behind the difference between the farm and retail prices as shown below.



Now, Mindanao Development Authority (MinDA) chair Emmanuel Piñol found another market for Mindanao rice farmers, and it is no other than Papua New Guinea, a country that imports rice at around 98% of its total consumption in a year. A Memorandum of Understanding (MOU) has been signed between Papua New Guinea Central Province Governor Robert Agarobe and Mindanao rice farmers, represented by MinDA Chairman Emmanuel Piñol this September.

The signing of an MOU on agricultural cooperation between Central Province Governor Robert Agarobe and Mindanao rice farmers, represented by MinDA Chairman Emmanuel Piñol. (MinDA chairman Emmanuel Piñol's Facebook photo)

TALKING POINT
“Not a few called the idea of exporting "dumb" because they could not seem to understand why Mindanao would export its rice while the rest of the Philippines is importing. The recent implementation of the Rice Liberalization Law, which resulted in the flooding of the local market with imported rice, has brought down the farm gate price of locally produced paddy rice to as low as P10 to P12 in many parts of Mindanao,”
MinDA chair Emmanuel Piñol
The rice that will be exported is of high-quality, not the ordinary rice that has overshadowed by foreign competitors in the market. According to Piñol, the answer to why Mindanao will export while the rest of the country imports is this: “traders are importing a commodity while Mindanao is exporting a special product,”

Piñol said the marketing strategy was to present Mindanao's Premium Rice “as a special product to enable it to command a better price and ensure farmers a decent income.”

He said the export opportunities now being offered has opened the door for Mindanao farmers, especially when they started shifting to the production of premium rice varieties such as Dinorado, RC160, RC218 or Double Diamond, 7-Tonner or Banaybanay Rice.


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