THE Department of Agriculture (DA) said on Thursday that the Philippines may start exporting corn this year to neighboring countries given an expected production surplus, if export restrictions on corn are lifted.
Agriculture Secretary Emmanuel Piñol said that the projected production of 8.1 million metric tons (MT) for both white and yellow corn is expected to exceed the domestic requirement of 5.6 million MT.
“This is the first time that the Philippines will achieve a 120 percent corn sufficiency in spite of a series of natural calamities which hit the country recently, including the seven-month El Nino,” Piñol said, citing a report by National Corn Program Coordinator and DA Assistant Secretary Federico Laciste.
Piñol said he would ask President Rodrigo Duterte during the Cabinet meeting on Monday to direct the National Food Authority (NFA) to amend its rules prohibiting the export of corn until the country doubles its corn production.
The DA called the NFA’s export restriction on corn as “unfair” and “unjust” to Filipino farmers because the entry of imported corn to the country has already been liberalized.
The projected corn surplus this year is also attributed to the stronger production of cassava, an alternative raw material for feeds, which has stabilized the corn and animal feed supply in the country.
In 2016, corn production hit 7.5 million MT for both yellow and white corn, while cassava production reached 536,000 MT.
The Philippines produces mostly yellow corn, of which 70 percent goes to the feed mills while 30 percent is used for food. At present, the government restricts only the commercial export of yellow corn until there is firm data on production surplus.
In a telephone interview, Roger Navarro, president of Philippine Maize Federation Inc. (PhilMaize), welcomed Piñol’s pronouncements but stressed that there must be a law or export policy on yellow corn to allow for a “truly” liberalized trade of the commodity.
“Under the current policy, the NFA still restricts exports of the grains, which is inconsistent with the idea of liberalized trade under the World Trade Organization (WTO) and Asean Free Trade Agreement,” Navarro said.
“The law would allow free market movement of yellow corn and allow local growers to finally export the grain,” Navarro said.
The official said that with such an export policy in place, corn stakeholders would be encouraged to invest, making the sector more competitive with the country’s Asean neighbors.
The reality, however, is that locally produced corn is more expensive compared to neighboring countries, which would make it difficult for the industry to actually start commercial shipment of the commodity any time soon.
Prices of locally produced corn average at P14 per kilo, while imported corn – which already includes freight, delivery and warehousing costs – goes for roughly the same price.
Navarro explained that the Philippines has not achieved a surplus in production in almost a decade, noting that current computations the government uses includes inputs from imported feedwheat and other raw materials for feeds.
“That’s why they arrived at that level of 120 percent sufficiency. But if we are talking about real surplus in production, we have not achieved it since 2008,” he said, noting that more than 1 million MT of imported corn entered the country last year.
Data from local feed millers support his claim, showing that more than 2.4 million MT of feedwheat, one of the key ingredients for hog and aquaculture feeds, arrived in the country.
“In fact, at the start of 2017, we are going to bring in more feeds to beef up our stocks and take advantage of lower prices in the global market and higher local demand,” one industry source told The Manila Times.
Lobby for export policy
Nevertheless, Navarro said that corn farmers will continue to lobby for the export policy to allow them to sell their produce abroad in order to take advantage whenever there is an upward tick in prices in the international market.
Lawyer Maia Chiara Halmen Reina Valdez, undersecretary for the Office of the Cabinet Assistance System, said that it was not up to Piñol to decide on the export of corn.
“They are not the regulatory agency. It is clear what is stated in Presidential Decree No.4,” Valdez said.
According to the law, the development of the rice and corn industry should fall under the National Grains Authority, now known as the National Food Authority (NFA), which is currently under the Office of the Cabinet Secretary.
Valdez said it would require a legislative amendment if Piñol wanted to change the NFA’s charter.