MALAYBALAY CITY (MindaNews/29 July) – The Department of Agriculture must pronounce a firm policy on the exportation of corn, Roderico Bioco, president of the Mindanao Grains Processing Inc. said, citing various international and domestic factors.
In a July 24 letter to Agriculture Assistant Secretary and corn program director Ed de Luna and Roger Navarro of the Philippine Maize Federation, Bioco cited among the domestic reasons the projected surplus in corn production from July to October this year due to the wet season.
“In particular, this on-going wet season harvest is a bumper crop with more than 500,000mt (metric tons) of inventory that cannot be accommodated in proper storage facilities,” he added in the letter, a copy of which he emailed to MindaNews recently.
Bioco, president emeritus of PhilMaize, said the problem has worsened with the arrival of feed wheat from Australia, which occupied a major portion of the storage capacity of the feed millers and third party warehouses.
He cited the shortage of warehouses in Cagayan de Oro City, “where most of the warehouse district in Puntod and other areas in the city are highly prone to flooding as shown by (tropical storm) Sendong.”
Bioco, founding chair of the newly-organized Bukidnon Kaamulan Chamber of Commerce and Industry (BKCCI), debunked opposition to exportation of corn because of food security as discriminatory.
“Arguments to keep local corn out of the export market due to food security concern[s] are all bull,” he said.
The Philippines, he added, regularly exports sugar, “even if we regularly have shortfall, thus the regular imports. Same is true with chicken and other food items.”
“So why the discrimination? Is it because most corn farmers are poor and they should remain to be so, so that our rich consumers in Manila will enjoy cheap pork and chicken?” he stressed.
Bioco cited that corn is a liberalized commodity because it was not exempted from the Agricultural Trade Liberalization Act of 1997, passed as a requirement to the Philippines’ entry to the World Trade Organization.
He said local producers can export corn because agricultural trade liberalization “is not a one-way street.”
Aside from this, Bioco said, domestic corn also had to contend with other corn substitutes such as feed wheat, sorghum and cassava, which come in at low tariffs or even zero tariffs.
He cited around 1.4 million metric tons of feed wheat would arrive between August and October this year.
Bioco said these commodities were traded at lower prices at US$260-270 or P10,920 –P11340 at P42 to a dollar per metric ton in Luzon ports. Landed cost borne by feed millers’ warehouses is only P12.50/kg, he added.
He also forecasted domestic corn prices to fall below P11.00/kg at farm level. He said this will make corn farming unattractive and may make farmers rethink their plan to plant the crop in the next dry season.
Aside from trade policies and dynamics, Bioco also cited climate conditions.
“There is an evolving El Nino already that will affect corn production in early 2013,” he added.
But he cited that “there is no warning yet issued by DA, and no preparations undertaken” even if Australia has already started warnings and expected rainfall to be below normal after having a 2-year La Nina driven record rainfall.
He added that with less rainfall there, “wheat production will be lower but quality will be higher.”
“So no cheap feed wheat (a corn alternative) is expected to come in 2013,” he said, adding, already, new feed wheat contracts are more expensive.
He also cited a “flash drought” in the United States Midwest, the food bowl of the world. He said this may likely affect US corn and soybean exports, and lead prices “to shoot up significantly in the world market.” He said the US supplies more than half of the yellow corn requirement.
Bioco said that ironically local corn prices are falling down.
“When we have a bumper crop, local dynamics come into play. The corn industry and its buyers have limited storage capacity. This is of course aggravated by the influx of feed wheat importation at zero tariffs,” he added. (Walter I. Balane/MindaNews)