Batac, Ilocos Norte

(First of six parts)

BATAC, Ilocos Norte—Garlic farmers in this province have shifted to the planting of other crops, corn in particular, as the unchecked smuggling and open importation of garlic from Taiwan pulled local prices below profitability levels.

According to Batac farmers, what used to be a billion-peso garlic industry in Northern Luzon has now been relegated to a backyard enterprise that is slowly collapsing to extinction because of the country’s allegiance to the World Trade Organization (WTO).

"Even at the municipal market of Batac, vendors are now selling Taiwanese garlic and consumers are buying them because they are cheaper," Florencio P. Laud, a garlic farmer and an outgoing municipal councilor, told The Manila Times.

Laud is blaming the WTO for the influx of Taiwanese garlic, which he said is the culprit behind the significant drop in farm gate prices of local garlic. The councilor knows his numbers because he is the chair of the municipal council's committee on finance, appropriations and labor.

With approximately 50,000 residents, the rural town of Batac, famous for its Marcos monuments, is among the remaining garlic-producing towns of Ilocos Norte.

Located more than 400 kilometers north of Manila, Ilocos Norte accounts for more than half of the national garlic production. Although the garlic-trading center is in Sinait, Ilocos Sur, Councilor Laud of Batac claimed that as much as 80 percent of garlic traded in Sinait town come from Ilocos Norte.

Of the 4,261 hectares planted to garlic in Northern Luzon last year, 3,251 hectares or 76 percent were in Ilocos Norte, data from the Laoag City branch of the Bureau of Agricultural Statistics (BAS) shows.

In 2003, Ilocos Norte produced 9.027-million kilos of garlic. This represented 85 percent of the 10.615-million kilos produced in the whole region and 58 percent of the 15.52-million kilos produced in the whole country.

An average garlic farmer in Northen Luzon harvested 2,490 kilos of garlic per hectare last year.

Ireneo Mandac, a senior agriculturist at the Batac-based Ilocos Integrated Agricultural Research Center-Satellite Station for Upland Towns 2, admitted that the number of garlic farmers in the province has fallen significantly since the country began importing garlic from Taiwan in the late 1990s.

Mandac said even government employees used to plant garlic in the early 1990s because of the good prices in the local market. Farmers, he said, netted hundreds of thousands of pesos in a single cropping in 1995.

"Those were the good days," said Rodolfo Rocutan, a garlic farmer in Barangay Kiling said. "Things have changed since the Taiwanese garlic arrived."

Mandac said that because of the entry of Taiwanese garlic, farm gate prices of Ilocos White, the main variety produced in Ilocos Norte, plunged drastically from a high of P180 a kilo in 1995 to P40 a kilo in 2004.

This forced many farmers to stop planting garlic, as manifested in the decline in garlic production and area harvested.

When contacted by the Times, the Agriculture Secretary Luis P. Lorenzo Jr. agreed to check the figures. "Let me validate this first," he said.

Data provided by Pauline Andres, a statistician from the Laoag City branch of BAS, shows that that the combined garlic production area in Ilocos Norte shrank by nearly half from more than 6,000 hectares in 1995 to 3,250 hectares in 2003.

Farmers also cut their farm area devoted to garlic. BAS data show that garlic farmers in Ilocos Norte had an average harvest area of 1.09 hectares.

This contracted to 0.75 hectare a farmer in 2003, based on data from the Office of the Provincial Agriculturist in Ilocos Norte.

(Second of six parts)

BATAC, Ilocos Norte+"We produce quality garlic. No one contests that," Florencio P. Laud, a garlic farmer and an outgoing municipal councilor in this rural town of 50,000 people said.

Laud, however, admitted that despite the better spicy effect of the Ilocos White garlic variety, many Filipino consumers are turning to Taiwanese garlic because of the latter's low price.

"The bulbs of Taiwanese garlic are bigger than our garlic's. But ours is tastier, with fuller aroma," he said, in defense of local garlic. "We have to capture a niche market for our product."

Garlic or Allium sativum L. has been associated with the Ilocano cuisine. The famous pinakbet of Ilocos cannot be complete without the local garlic's green tops, Laud said.

The local garlic, particularly the Ilocos White, is believed to be rich with calcium, phosphorus, and potassium.

Also used for medicinal purposes, the local garlic is said to contain antibiotic substances that inhibit the growth of certain bacteria and fungi. Garlic is used to treat wounds, toothache, epilepsy, and fungal skin diseases.

Food manufacturers used to be the major buyers of Ilocos White. Laud, however, admitted that longaniza processors and kornik makers in Ilocos are now turning to Taiwanese garlic to cut cost.

Ireneo Mandac, a senior agriculturist at the Batac-based Ilocos Integrated Agricultural Research Center-Satellite Station for Upland Towns 2, said the farm gate price of Ilocos White premium class used to be P200 a kilo in the mid 1990s.

"I myself grossed P200,000 after harvesting a ton of garlic from a fourth of a hectare in a single cropping in 1996," Mandac said. "I was able to purchase a car because of that."

In 1995, Ilocos could meet the national garlic demand as farmers were enticed by good prices to expand their hectarage devoted to the crop.

When the former president Fidel V. Ramos repealed Republic Act 1296 or the law that restricted the importation of certain vegetables in 1996, garlic prices began to drop. Taiwanese garlic was sold at a low P20 a kilo. This was lower than the production cost of P30 a kilo in Ilocos.

"We consider the drop in prices as a major problem. This was compounded by the increase in production costs, including the price of farm inputs such as fertilizers and pesticides and the cost of labor," Laud said.

For one, Laud noted that the price of urea fertilizer climbed to P650 a bag this year from only P350 a bag in the early 1990s.

With the slump in prices, Laud said many farmers either slashed their harvest area for garlic or abandoned cultivation of the crop.

Data from the Department of Agriculture's High Value Commercial Crops Program show that the national garlic production shrank by 2,300 hectare or 29 percent to only 5,600 hectares in 2002 from 7,900 hectares in 1997.

Laud admitted that he is now tilling only 2,000 square meters for garlic farming, which is half of what he used to devote for the crop.

Rodolfo Rocutan, another garlic farmer in Batac, said that of the 10,000-square meters that he used to devote for garlic farming, only 2,000-square meters is now allocated for the same purpose.

Rocutan said he cultivates other crops such as corn, vegetables, mongo and root crops. However, he vowed to continue devoting a small area for garlic farming for the cause of saving the Ilocos White variety.

Asked when they plan to increase production again, the Batac farmers said it all depends on the price and demand, two important concepts of a liberalized market.

"We had even tried the Taiwanese garlic before, but found it not suitable to our local conditions, maybe because the weather and soil in Ilocos are different from those in Taiwan," Laud said.

While garlic can be grown in different types of soil, agriculturists recommend sandy, silt and clay loam for the commercial production of the crop. Garlic does not grow well in areas with excessive rainfall.

(Third of six parts)

LOCAL garlic production has been on a decline since the country opened its market to Taiwanese garlic in the late 1990s. For one, the income of garlic farmers shrank by P11 a kilo year-on-year in 2004, triggered by the influx of cheaper imports.

"We used to sell garlic at P150 a kilo in the early 1990s. Now, we could hardly sell them at P30 a kilo," Rodolfo Rocutan, a garlic farmer in Batac, Ilocos Norte said. "We are producing garlic at break-even costs."

Asked why he keeps planting garlic, Rocutan, a council member of Barangay Kiling, said his harvest is now mainly for home consumption. "Sometimes, we just give them to relatives and friends," he added.

With most household consumers turning to cheaper Taiwanese garlic, the only remaining loyal buyers of Ilocos White are the local tourists.

Data from the Bureau of Agricultural Statistics (BAS) show that in 2003, garlic accounted for 0.26 percent of the total agricultural crop production.

The figure is a significant drop from 0.29 percent registered in 2002.

The BAS reported that from 16.25-million kilos in 2002, national garlic production fell by almost 4.5 percent to 15.52-million kilos in 2003. This was due to the continuous drop in farm-gate prices of the commodity.

According to the BAS, the average farm-gate prices of garlic dropped by 14 percent to P50.53 a kilo in 2003 from P58.82 a kilo in 2002. These figures are still higher than the cutthroat prices of Taiwanese garlic, which are being traded at P20 to P30 a kilo.

Because of the twin drop in output and prices, the total value of national garlic production dived by as much as 18 percent year-on-year in 2003.

After harvesting P955.83-million worth of garlic in 2002, the total earnings of garlic farmers fell by P171.6 million to P784.23 million in 2003.

In his report, BAS director Romeo S. Recide attributed the drop in garlic production to the reduction in planting area. "There was low market price due to influx of imported garlic during the first semester," he said.

The slump in national garlic production persisted in the early part of 2004. According to the BAS, garlic recorded a significant decline of 25 percent in gross earnings during the first quarter of the year.

Cropping season for garlic usually starts in October or November and ends in February or March of the following year. The first-quarter production, therefore, mostly represents the full-year production.

"Garlic production continued to slide [in the first quarter]," Recide reported. "This was explained by farmers shifting to other cash crops due to the influx of imported garlic in the local market."

The total value of garlic production shrank by a fifth to P577.71 million as of March 2004 from P766.58 million a year earlier. Production fell from P931.02 million in March 2002.

This was due to a 3.9 percent year-on-year decline in output and 22-percent drop in farm gate prices, which refer to the levels at which traders buy the products from the farmers.

National garlic output dwindled by 590,000 kilos to 14.53-million kilos as of March 2004, from 15.12-million kilos a year ago. The country produced 15.78-million kilos of garlic in the first three months of 2002.

The income of garlic farmers shrank by another P11 a kilo in 2004, because of the drop in farm gate prices triggered by the entry of the much cheaper Taiwanese garlic.

From P50.70 a kilo in 2003, the average farm-gate prices of garlic eased to P39.76 a kilo in 2004. In 2002, the price was P59 a kilo.

Prices in Ilocos Norte, which accounts for 58 percent of the national garlic output, dropped to P39.61 a kilo in 2004 from P47.63 a kilo in 2003, according to the Laoag City branch of BAS.

Ireneo Mandac, a senior agriculturist at the Batac-based Ilocos Integrated Agricultural Research Center-Satellite Station for Upland Towns 2, noted that the farm gate price of garlic was P125.85 a kilo in 1999.

(Fourth of six parts)

GARLIC farmers in Ilocos Norte have been blaming the World Trade Organization (WTO) for the collapse of the local garlic industry.

"The entry of imported garlic displaced many farmers in our province. It caused great repercussions not only on prices but also on the volume of production," Florencio P. Laud, a garlic farmer and an outgoing municipal councilor of Batac said.

In the heyday of the garlic industry, garlic farmers in Ilocos were considered more prosperous than other farmers because they were able to put their children to college. Now, Laud said many garlic farmers in the region shifted to other crops for survival.

Rodolfo Rocutan, a garlic farmer, said the improved prices of corn, both in the international and domestic markets, forced farmers to plant corn instead of garlic in the last dry cropping season.

"In our district in Barangay Kiling, there are only two of us still planting garlic. Other farmers turned to corn and other crops," Lacutan said.

Ireneo Mandac, a senior agriculturist at the Batac-based Ilocos Integrated Agricultural Research Center-Satellite Station for Upland Towns 2, said the farm-gate price of yellow corn improved to P10.60 a kilo this month from P7.50 a kilo a year earlier.

Laud described the heyday of the garlic industry as the period before the Philippines became a member of the WTO in 1995.

The WTO is a multilateral-trading system that commits its 148 members to the idea of free trade. It seeks to convert the planet into a common market.

To achieve this, member countries, including the Philippines, were required to pass laws that would allow the entry of foreign goods, including farm products. Countries were also told to lower their tariffs or price-based taxes imposed on farm imports.

In compliance with WTO policies, the former president Fidel V. Ramos signed into law Republic Act 8178 or the Agricultural Tariffication Act on March 28, 1996. The law effectively lifted the country's quantitative import restriction (QR) on all farm imports, except rice, and replaced them with tariffs.

Ramos also repealed Republic Act 1296 or the law that restricted the importation of onion, garlic, potato and cabbage.

Since then, the Philippines began importing more than 30 fresh or chilled vegetables such as garlic, onion, tomatoes, leeks, cabbage, cauliflower, broccoli, lettuce, carrots, turnips, radishes, cucumber, peas, beans, mushrooms, truffles, celery and spinach.

From 3.9-million kilos in 1996, vegetable imports shot up to a high of 37.8-million kilos in 1999. Garlic imports surged from practically zero in 1994 to 16.6 million kilos in 2002.

Imported garlic accounted for 27 percent of the 28-million kilos of fresh and chilled vegetables imported annually from 1995 to 2001. As a result, farm-gate prices of garlic plunged by P44 a kilo in 1997 alone.

John B. Kim, chief of the antismuggling task force in La Trinidad, Benguet, said both legally-imported and smuggled vegetables were displacing Filipino vegetable growers. Most vegetable imports, he said, come from China, Australia, New Zealand, the Netherlands, Germany and Belgium.

Kim disclosed that in 2003, some 926,640 kilos of fresh vegetables were smuggled into the Philippines. These included 716,000 kilos of garlic, 148,000 kilos of onion and 60,540 kilos of carrots.

Smuggled garlic is cheaper than legally-imported garlic because it evades the usual 40-percent tariff collected by the Bureau of Customs (BOC).

On December 30, President Arroyo issued Executive Order 264 which raised the tariffs on imported vegetables from seven to 10 percent to a higher range of 20 to 25 percent on most vegetables and to a higher range of 40 percent on a select few.

The EO, which increased the tariff rates on garlic, onion, cabbage, carrots and potatoes to 40 percent is supposed to be implemented this year. However, Governor Raul M. Molintas of Benguet claimed that the BOC was still collecting tariffs ranging from only seven to 10 percent

(Fifth of six parts)

GARLIC farmers said the government is turning a deaf ear to their plea for support amid the collapse of the local garlic industry.

As garlic prices tumbled from P180 in 1995 to P40 in 2004, the total garlic-production area in Ilocos Norte also shrank by half to only 3,000 hectares.

Florencio P. Laud, a garlic farmer and an outgoing municipal councilor of Batac, Ilocos Norte, blamed the influx of Taiwanese garlic for the crisis that started when former president Fidel V. Ramos repealed Republic Act 1296 or the law that restricted the importation of vegetables.

Ilocos Norte accounts for the more than half of the national garlic production, which used to be a P1-billion industry.

"We referred this matter to higher officials, but we have yet to hear from them," Laud said.

Laud said that while Rep. Imee Marcos of Ilocos Norte distributed subsidized seeds to local garlic farmers, this did little to ease the pains of the farmers.

"The problem is in pricing and marketing," he said. "If the government could only limit the entry of Taiwanese garlic, maybe prices will go up."

Rodolfo Rocutan, also a garlic farmer in Batac, said the Taiwanese garlic should be priced higher so that prices of Ilocos White garlic variety would climb back to P50 to P60 a kilo.

"At the present P20 to P30 a kilo, we are barely breaking even," Rocutan said. "At P50 to P60, we would be okay. At P70 to P100, we would be happy."

To achieve this, Laud said the government should institute safeguards for local garlic farmers in the form of higher tariff rates. At present, the government imposes a 40-percent tariff on imported garlic.

Data from the National Statistics Office (NSO) show that the Philippines imported a total of 16.61-million kilos of fresh or chilled garlic worth $3.762 million in 2002. This accounted for 60 percent of the total volume of vegetable imports in that year.

Sources, however, claimed that it is the smuggled garlic, which amounts to 1-million kilos annually, that is dragging down the local prices.

"Why does the Philippine government cuddle the Taiwanese farmers by accommodating their products when the garlic farmers in Ilocos were hurting," one farmer asked.

The Ilocos farmers also denied getting any help from the national government and claimed they have not heard of the Agricultural Competitiveness Enhancement Fund (ACEF).

Under Republic Act 8178, otherwise known as the Agricultural Tariffication Act of 1996, the government put up ACEF to cushion the impact of lifting the quantitative restrictions (QR) on farm products under the aegis of the World Trade Organization (WTO).

Sen. Ramon B. Magsaysay Jr., chair of the Senate committee on agriculture, disclosed that as much as P2.846 billion of the relief fund remains unallocated.

The ACEF fund comes in the form of interest- and collateral-free loans to finance agricultural projects.

Farmers' groups, however, were complaining that only large agri-business groups were able to tap the fund in the past

(Conclusion)

THE influx of vegetable imports was mainly brought about by the reduction in tariff rates on farm products, according to an agribusiness specialist.

In a paper entitled "A Closer Look at Philippine Vegetable Imports," Ditas R. Macabasco noted that importation of fresh or chilled vegetables grew seven-fold from 3.9-million kilos in 1996 to 27.5 million kilos in 2002.

"The main contributory factor is the reduction in tariff rates. Other reasons include the changing landscape for fresh produce marketing as well as increased demand for the products," Macabasco said.

A study conducted by Dr. Darlyn Tagarino and Jariet Siano of Benguet State University (BSU) said the importation of vegetables does not only cause massive losses in terms of supposed profits but has even caused emotional unrest among the farmers.

Of all vegetables, garlic has suffered the biggest threat from imported products over the past three years. In 2002, the Philippines bought more garlic from China and Taiwan than from garlic farmers in Ilocos.

While local garlic production reached only 16.25-million kilos in 2002, garlic imports climbed to 16.61-million kilos in the same period.

Data from the Department of Agriculture's High Value Commercial Crops Program show that based on the ideal annual garlic requirement of 0.62 kilos per capita, the Philippines needs at least 51.36-million kilos of garlic each year.

With local production reaching only 15-million kilos annually, the Philippines has a shortfall of 36-million kilos of garlic. Despite this, analysts noted that local production continues to drop.

From 20.2-million kilos in 1997, local garlic output fell to 15.52-million kilos in 2003 and to only 14.53 million kilos in 2004.

Macabasco said that while an increase in tariff rates on farm imports could prop up prices and increase production again, much remains to be done to make the local vegetable industry competitive.

"The supply chain must be addressed. There is a need to develop marketing infrastructure. Overall, there is a need to continue improving on cost, quality, supply reliability, appropriate product innovation and customer service which are the very attributes of competitiveness," Macabasco said.

A book published by the non-government Philippine Alternative Development Foundation entitled "Trade Liberalization, Agriculture and Small Farm Households in the Philippines," concluded that the direct net effect of trade liberalization on small farmers is negative. "The lack of support services and safety nets limit farmers' ability to take advantage of some opportunities that trade liberalization should offer and amplify the threats that it brings," the book said.

The Department of Agriculture admitted some of these problems, saying that while there is a local market demand for good grades of garlic, the farmers cannot cash-in on the demand due to technical and marketing problems.

"Low-farm yields, disease, storage pests, and inefficient labor-intensive post-harvest practices work against the farmers. A trader-controlled marketing system results in inequitable distribution of profits," the department said.

Garlic farmers in Ilocos, however, seem more concerned about the poor prices in the market, because of the influx of Taiwanese varieties. "The major problem is pricing," a farmer insisted.

Reinero B. Belarmino Jr., a DA regional field unit director, blamed smuggling as the cause of the soft prices of garlic. "Customs officials should guard our points of entry more closely," he said.

He also denied that the department is not doing anything to help the garlic farmers. "We are trying to introduce technologies like injecting growth hormones to improve the yield," the DA official said.

Despite the entry of Taiwanese garlic, farmers in Ilocos said they would carry on the garlic production business to save the Ilocos White variety.

Rodolfo Rocutan, a garlic farmer in Batac, Ilocos Norte said he would still plant garlic in spite of the low prices. "We are willing to take the risk in the hope that prices would pick up one day," he said.

Florencio P. Laud, a garlic farmer and an outgoing municipal councilor of Batac, said garlic farming is not only a business enterprise but also more importantly a heritage in the province. "We inherited it from our ancestors, and we intend to pass it to our children," he said.

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