Liberalization of investments in rice, corn industry pushed
ECONOMISTS, lawmakers and officials of the Department of Agriculture (DA) and Board of Investments ((BOI) have expressed support for the liberalization of foreign investments in the rice and corn industry to boost food production, increase farmers income, and foster greater competition to benefit consumers.
In a roundtable discussion at the House of Representatives on bills seeking to increase investments in the rice and corn sector, Mari Charina Ubarra, a technical consultant at the Foundation for Economic Freedom (FEF), said a study conducted by FEF showed that while Presidential Decree 194 opened the door to foreign investments in the rice and corn sector, it restricted the investment to a period of 30 years.
According to Ubarra, this provision on divestment by foreign investors after a 30-year period is a “unique requirement” only found in the Philippines, which hobbles further investments in the sector.
Meanwhile, Christopher Ilagan, chairman of the agribusiness committee of the American Chamber of Commerce in the Philippines, said the restriction isn’t immediately noticeable to investors and they only learn about it after they have invested in the country.
Ilagan pointed out the power of the National Food Authority (NFA) to oversee this divestment provision has been removed by the Rice Tariffication Law, which adds to the confusion as ro where foreign investors will turn to for approval of their divestment plans.
Ubarra said if full opening of the rice and corn sector won’t be allowed, an alternative proposal to attract investments and modernize the sector it to extend the divestment period to 50 years.
He added that the agriculture sector will need at least P1.3 trillion for irrigation, post-harvest facilities and other infrastructure to catch up with its Asian neighbors—a large sum that could be reduced by attracting foreign investments.
Agriculture assistant secretary U-Nichols Manalo, director of the National Rice Program, said the DA welcomes efforts to attract investments in agriculture to address years of “under-investment in the sector.”
NFA administrator Roderico Bioco told the roundtable session that NFA alone will need P93 billion to build dryers, rice mills and other infrastructure needed to build up capacity to meet the country’s rice buffer requirement. The same amount may have to shouldered by the private sector to ensure the country’s food security, he said.
BOI director Raquel Echague said government is promoting high-tech agriculture as a possible area of investment for foreign direct investors.
Foreign investments in the rice and corn sector now stand at P21 billion and employ more than 4,000 workers.
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