TOO much noise has been generated over the importation of sugar. Noise is now also created over the threatened shortages of onions and soon, garlic. There is also now a lot of talk about a shortage of salt.
And most people, including some of our elected officials, fail to figure out that all of this noise is misplaced, since they simply look at the symptoms of the problem, not its causes. It is easier to grandstand and put the blame on bureaucrats and technocrats. And even here, the congressional inquiries appear to give Executive Secretary Victor Rodriguez an easy pass. It seems that the hearings have allowed Rodriguez to escape scrutiny, when it seems that the root of all the mess may have emanated from him when he, on the authority of President Ferdinand Marcos Jr., designated suspended Agriculture undersecretary Leocadio Sebastian as ex-officio chairman of the Sugar Regulatory Administration (SRA) board, and granted him vast signing powers.
Rodriguez cannot run away from explaining why on an urgent issue like sugar importation he chose to ignore the memorandum sent by Sebastian, and the attached draft of a sugar importation order which the President had asked the SRA to prepare. While for lawyers like Rodriguez, an importation plan may sound tentative, for technocrats like Sebastian, a plan is a blueprint for a course of action that has already been approved in principle. A plan is not a mere proposal or a feasibility study. And yet, it seems many are happy to let Sebastian and former SRA officials take the fall.
And this is why we are still in deep trouble, even if the Sebastians of this world will be tarred, feathered and symbolically and figuratively quartered while still alive in the eyes of the public. This is because the problem goes beyond personalities and is deeply structural. Our agricultural sector is in such a bad shape that it now threatens our food security. Rising prices and shortfalls in supply not only of sugar, but of onions, garlic and salt are just the tip of the iceberg. The perfect storm will still come even if we offer up our bureaucrats as sacrificial lambs, or as convenient excuses to hide higher level culpability.
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And woe to President Marcos for inheriting the problem. Either he knows its extent, that's why he chose to concurrently hold the cabinet portfolio for agriculture, or he has miscalculated, so that he is now up against the wall because he chose a department that requires urgent attention and care, and the latitude left for him to make a mistake is so narrow.
The reason we import is simple. We import because it is cheaper than relying on locally produced agricultural commodities. And the reason for this is that many of our crops are not competitive with their counterparts in the global markets. It is easy to blame importation as the culprit, when for the most part it is a remedy to stabilize prices in the face of shortages in the domestic supply of commodities. And importation is not even a walk in the park since aside from the bureaucratic maze that an importer needs to navigate, in addition to the imprimatur from government bodies like the SRA board, tariffs are also imposed. For vegetables, fish and meat and other products, the tariff ranges from 35 to 50 percent. For sugar, it goes to as high as 60 percent. It is therefore idiotic for an importer to hoard since it could mean delaying the recoupment of the importation cost, plus the storage of highly perishable crops would require additional costs, and the longer they are stored, the higher the storage costs will be.
Tariffs are trade barriers that are imposed by a country to protect its local farmers. These protectionist fees are imposed to push local agriculture to modernize and become competitive. Sugar, as an example, is highly protected at 60 percent. It therefore behooves one to ask why the sugar industry remains inefficient and unable to compete with other countries that produce cheaper sugar. We cannot blame industrial users of sugar if they would prefer to import cheaper sugar from Thailand. The law of comparative advantage would rationally direct them to such an option.
The situation of the sugar industry can be seen as a symptom of what ails Philippine agriculture. Our average farm size has become smaller, which reduces not only overall yield but also the viability of investing in modern technology whose costs cannot be compensated by the expected yield. Aside from the land reform program which reduced average farm sizes, this is also caused by increasing populations that now require land for industrial and residential uses. This is aggravated by the declining trend of the number of farming households. More people would rather seek industrial employment, or work in the service industry, or become migrant workers. This is further aggravated by the bias of people against farming as a low-status kind of work. Bureaucratic inertia and technical difficulties further limit the transfer of modern technologies that would effectively increase yield at lower cost to local farmers and producers.
Meanwhile, because of the relative cost of legal importation, there is more incentive for the unscrupulous, often in cahoots with corrupt bureaucrats and regulators, to engage in smuggling of products to get around the payment of tariffs and the processing of needed permits. These smuggled products are also often hoarded to further manipulate the price.
Congress can begin fixing what ails Philippine agriculture by asking Sen. Cynthia Villar to expedite the passing of the proposed national land use act, and to pass laws that would prohibit the conversion of farmlands and coastal areas into malls and subdivisions. And if there is one thing that needs to be investigated by Congress, it should be the failure to modernize our agriculture despite all the resources given to it, instead of this sugar importation brouhaha that does not even go into the heart of the problem.