SMC’s parallel NFA
JOJO ROBLES
PERHAPS it’s about time we allow the private sector to take over the rice business, which has been the source of grief for many millions while making only a few cartelized traders, smugglers and crooked government officials rich. And if tariffication, which allows anyone to import the staple, becomes possible, the delicate balance of keeping both consumers and rice farmers happy may just happen.
By now, you’ve probably heard of San Miguel head honcho’s proposal to build a spanking new P750-billion airport in Bulakan, Bulacan. But the high-flying chieftain of the country’s biggest conglomerate has also set his sights on the rice trading and distribution market, which he promises to shake up by dramatically increasing the buying price of palay for farmers while making significant imports from our rice-producing neighbors in order to drive down the price of rice for consumers.
As Ang sees it, the mandate of the government as far as rice is concerned is simple: keep enough farmers planting more and more rice to improve production while sparing consumers the spikes caused by reduced supply and cartelization that causes price manipulation.
Ang’s SMC knows all about purchasing, storing and contracting staples, through the supply chain built by its B-Meg feeds outfit and the contracting of poultry and other meat growers in order to supply its Purefoods unit.
San Miguel’s network of storage silos and buying stations is very much like a parallel National Food Authority (only with a lot more money), with facilities from the farthest points north of the country in Luzon to its southernmost tip in Mindanao.
SMC also processes 5 million tons annually of corn, sorghum and other imported grains to create its food products and animal feeds in a Batangas facility. In the coming years, according to Ang, San Miguel intends to double the capacity of its feed mills and silos in order to expand importation of such commodities for its food and feed business.
In other words, San Miguel, an acknowledged leader in the food and feed businesses, knows all about telling farmers to grow stuff for profit and about importing and storing grains. And with impending tariffication of rice which will allow anyone to import the staple — the proposed enabling law for this scheme has just passed the House of Representatives on third and final reading — SMC, more than any other business, seems ready to capitalize.
But going into the rice business is not strictly a for-profit move for Ang and his diversified conglomerate. Because of his knowledge and experience in contract growing and grains trading, he is surprised that the government cannot simply hike the buying price of palay to benefit farmers and import more cheap rice from Vietnam and Cambodia to flood the market and keep prices stable.
According to Ang, the government could easily expand its budget for the purchase of rice if it was really serious about attracting more farmers to plant the staple, instead of spending for things like the expanded Unconditional Cash Transfer dole-out program. By his estimate, if San Miguel more than doubled the NFA’s palay buying price of P17 a kilo and bought the unmilled harvest at P40, it would ensure that farmers would keep planting in the years to come.
If the farmers are given a 10-percent yearly increase in their target harvest every year for 10 years, that would mean that SMC-contacted rice farmers would double their production in a decade. And the country’s food security would be assured, besides.
As far as importing rice is concerned, Ang has an even better idea: By importing rice in bulk (without sacks), he says that milled rice can be purchased from Vietnam and Cambodia at half the price of retail in places like Metro Manila. Because he checks regularly on grains prices, the SMC boss knows exactly what the price of rice is in big producers like Indochina — and that the cause of the markup for imported varieties is the sacks used in packaging.
Imagine that: the sacks that imported rice comes in immediately double the price. If people were encouraged to bring their own containers or if retail outlets used cheaper packaging, the price of rice would go down very significantly, Ang believes.
“The idea is to keep prices low and stable for consumers by buying cheaper in bulk from abroad, while ensuring food security and happy farmers by purchasing their produce at significantly higher prices, if they increase production consistently,” said Ang. “With tariffication, we can enter the market and do exactly that.”
The government has, for many decades since the postwar period, thrown immense resources at the rice problem, with so little to show for it by way of stable prices or increased food security. Maybe, just like San Miguel’s Bulacan airport proposal, this is an idea whose time has finally come.
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Yesterday was the 84th birth anniversary of the greatest media owner I have ever had the pleasure of working with – the late Antonio L. Cabangon Chua. Ambassador Cabangon Chua was the owner of Aliw Broadcasting Corp., which is probably more known to most people as AM radio station dwIZ 882, where I have been hosting the popular “Karambola” program with Conrad Banal, Jonathan de la Cruz, RJ “Thinking Pinoy” Nieto and Trixie Cruz Angeles since the beginning of 2015.
As someone who’s been toiling for more than 30 years in media, I’ve seen all sorts of owners of media enterprises. Without disrespecting these fine, committed people, I think Tony Cabangon Chua is still ahead as far as supporting his workers by giving them everything they need to get the job done and standing by them when terrible political and other forces are brought to bear in order to shut them up.
It’s people like Ambassador Cabangon Chua (and The Manila Times Chairman Emeritus Dante A. Ang) who keep enterprising journalism alive. And one day, if I’m up to it, I shall reveal specific incidents of how great media owners helped nurture my own career as a lifelong journalist.
Maraming salamat po, Amba.
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