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The Cooperative Development Authority (CDA) opposed a blanket ban on cooperatives’ participation in importing rice as it may discriminate against legitimate groups, but lawmakers and government officials argued that the move is a done deal.
Senators and the Department of Agriculture (DA) have already agreed to allow traders and corporations to only import rice during certain months of the year to avoid this overlap with the local harvest, a situation that could lead to a glut and drop in prices.
During a hearing in the Senate on the fictitious scheme for traders in the rice import business, on Thursday, the Undersecretary of Agriculture, Rodolfo V. Vicerra, said that they are now preparing an administrative order (AO) to formalize the elimination of the cooperatives and associations of irrigators from the list. of eligible rice importers.
Vicerra said that based on his understanding of the existing laws covering cooperatives, only transport cooperatives can import fuel and spare parts.
“All other types of cooperatives do not have as their main mission to form cooperatives,” he said. “On our recommendation, even if importing is not their primary mission, they will be eliminated as eligible rice importers,” he added.
The pronouncement was received by Senator Cynthia A. Villar, lead author of the rice trade liberalization law (RTL) that deregulated the industry and head of the Senate Committee on Agriculture, Food and Agrarian Reform that conducted the investigation on Thursday. .
“The DA has promised us to remove cooperatives and irrigation associations from the list of organizations that can import rice. They will only allow legitimate rice traders, ”Villar said.
CDA opposition
However, in the last part of the hearing, the president of the CDA, Orlando Ravanera, expressed his opposition to the total ban on the importation of rice to cooperatives.
But Villar intervened by cutting Ravanera, who was about to explain why he opposes the measure. The senator told him not to bring it up again.
“You are OK cooperatives hindi naman scold–me-to import. For. That has been discussed. Ang permitted long may-to import yes transport cooperative. Get out [rice importation] to merchants. That was discussed. [The good co-ops don’t import. Stop that. That has been settled. The only ones allowed to import are transport co-ops]”Villar said, adding that CDA should blacklist all fictitious cooperatives of unscrupulous rice traders.
In an exclusive interview with the Business mirror Minutes after the investigation, Ravanera explained that imposing a total ban on cooperatives is discriminatory against medium and large cooperatives that have sufficient capitalization to enter the rice and import business.
Medium cooperatives have a capitalization of P15 million to P100 million, while large ones have more than P100 million, Ravanera said.
Only micro cooperatives
He said that only those micro-cooperatives are being used as mannequins by unscrupulous merchants.
Ravanera said that eliminating the right of cooperatives to import rice would reduce competition in the market, especially in the provinces, as people with financial and technical capacity could actually get into the rice business.
He explained that instead of legitimate cooperatives with financial and technical capacity being able to import rice and sell it directly to their localities, consumers in his area would have no choice but to buy from retailers who are supplied by traders, Ravanera said.
In addition, Ravanera said that it is the right of cooperatives to import rice in times of scarcity in the local harvest so that they can meet their needs, especially the families of their members.
Ravanera appealed to the authorities to give them the opportunity to become part of the rice import system again and assured senators and the public that the fictitious cooperatives would be eliminated from the import business.
Reset CDA as filter
The CDA official called on the government to reestablish the agency as part of the rice system, as they have the ability to filter out cooperatives that want to import rice.
“As president of the CDA, I assure you that cooperativism will not be used as fictitious if you give the CDA that authority again to issue CGS. [certificate of good standing] for those qualified to import, ”said Ravanera.
“I guarantee Senator Villar, in the event that the cooperatives are used again as mannequins after bringing back our participation in the import system, then I will present my resignation,” Ravanera added.
Before 2015, he said that the CDA was a vital part of the rice import system, as farmer cooperatives looking to buy rice from abroad must obtain a CGS from the agency.
(Read the story here: https://businessmirror.com.ph/2020/02/14/cda-presses-overhaul-of-rice-import-scheme/)
The CGS, he said, determines whether a cooperative is really capable of importing rice in terms of its financial situation and whether it has the necessary warehouses.
Before issuing the certificate, the CDA physically inspects the cooperative’s office and warehouses to verify their ability to import rice. The CDA will not issue the CGS if it considers that the cooperative is unable to import the basic product.
However, Ravanera said that the National Food Authority (NFA) removed this requirement for participation in the private sector import program in 2015. The NFA did not say why it removed the CGS.
CDA’s involvement in private sector imports was limited to verifying with the NFA that the cooperatives submitted the same financial documents to the food agency.
However, Ravanera said the agency includes a disclaimer in every certification of a cooperative’s financial statements that the CDA does not guarantee the cooperative’s import capacity.
Restricted import
During the hearing, the senators and the district attorney agreed that rice importers across the country will only be allowed to import the product for a total of five months a year.
Importers will only be issued the Sanitary and Phytosanitary Importation Clearance (SPSIC) during the months of November, December, January, May and June.
With this, the Office of Plant Industry (BPI) will not issue SPSIC during the months of February, March, April, July, August, September and October.
“[What we talked about here is], one, DA will issue an Executive Order that will not allow cooperatives and irrigation associations to import and then, you will not allow BPI to issue import permits during harvest, before and during harvest season ”, said the head of the Committee Villar. as a summary of Thursday’s hearing procedures.
Villar consulted the DA about the rice harvest season and determined that the months of February, March, April, July, August, September and October were the best times to avoid imports. SPSICs for the importation of rice are only valid for 60 days from their issuance.
DA undersecretary, Vicerra, said the goal is to see the arrival of imported rice during the lean months of January, February, July and August.
