Press Release
October 29, 2009

LOREN URGES MORE GOV'T SUPPORT FOR LOCAL
AGRICULTURE TO COMPETE

PASSI CITY, Iloilo - Sen. Loren Legarda today urged for more government support and "safety nets" for agricultural industries, including sugar, in the light of the free trade agreement among members of the Southeast Asia Nations (ASEAN).

Loren made the appeal in the light of the of the signing of the ASEAN Trade in Goods Agreement (ATIGA) during the 14th ASEAN Ministers' summit in Thailand on February 26, 2009, drastically lowering tariffs on agricultural products like rice and sugar in ASEAN trade.

"The industry needs to brace itself for the impact of trade liberalization within the ASEAN," said Loren, referring to the agreement. While the objective is to establish a free flow of goods in the ASEAN market, Philippine agricultural products like sugar and rice will be placed at a disadvantage in the short run because of their being uncompetitive."

The Philippines is the world's biggest rice importer, importing rice mostly from Vietnam and Thailand, while the Philippines' sugar production has been on a decline.

"Economic integration can be a two-edged sword. There is hope that our commitments to the ATIGA will provide the impetus for our industries to align themselves along areas of competitive advantage in the long run. However the adjustment process in the immediate term is quite worrisome, especially in the light of the impending fiscal crisis and the havoc wreaked on our agriculture by the recent natural disasters," said Loren.

Addressing the 39th annual meeting of the Jalasig Sugarcane Planters Association here, Loren, who is the chair of the Senate committee on food and agriculture, warned that unless "we succeed in listing sugar in the highly sensitive list, tariff on imported sugar under the AFTA will be slashed from 38% to 28% in 2010.

"Even if we succeed, the measure will provide only transitory relief. Beyond the short term, our government needs to overcome the utter neglect that has characterized its past performance, and provide real safety nets and support mechanisms that will help agriculture become competitive. That is my vision for the sugar industry, and for Philippine agriculture as a whole."

The Philippines is also negotiating with Thailand for a 35 percent tariff on rice imports, while Thailand wants the Philippines to cut the tariff to 20 percent. This would place the local rice industry under a graver threat from more massive rice importations as the world's largest importer of the staple.

Lower tariffs on Philippine agricultural products would place them at a disadvantage in competition with similar products from ASEAN countries because of the higher cost of local agricultural production. This would give less incentive for Filipino farmers to produce more to cover the local market.

In the case of the sugar sector, Loren noted that there has been a decline in sugar production.

"I understand that this year has been relatively benign for the domestic sugar industry. Philippine Sugar Millers Association President (PSMA) Archimedes Amarra said that we already completed shipments to US on March 20, 2009 and by the end of 2009 we could ship to the world market 100,000 metric tons. He assures us that that there is enough supply to cope with the demand even though production has been declining due to high input costs. "Actual sugar production at 2.197 million metric tons has enabled the country's ending inventory of domestic sugar to regain reasonably normal levels. However this is a big dip from the 2007/2008 crop year output of 2.45 million metric tons �"

Loren said that as chairperson of the Senate Committee on Agriculture, she had initiated measures aimed at reshaping government policy towards agriculture.

"At the end of my term, I hope to leave behind a legacy that will promote competitiveness in agriculture. This legacy consists of three major pieces of legislation, namely the Agricultural Extension Bill, the Agri Agra Bill which has already passed the Bicameral Conference Committee, and the reorientation and restructuring of the budget of the Department of Agriculture," said Loren.

Under the agricultural extension bill which she is sponsoring, Loren hopes to further strengthen and expand agricultural extension aid to farmers by providing more incentives such as higher salaries and more technical equipment to the country's 20,000 extension workers. These workers spread more knowledge and technical expertise to farmers in improving their production.

The Agri-Agra bill would provide more credits to farmers and agricultural workers through the private commercial banks by amending the presidential decree currently governing such loans, enabling banks to provide easier credits to agriculture.

Loren wants to provide more budgetary support to critical areas of agriculture and fisheries to increase production and provide more income farmers and fisherfolk.

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