Opinion | Chinese smugglers ruin Philippine farmers and China's goodwill
By Augustus K. Yeung
INTRODUCTION
Philippine farmers say smugglers from China are to blame for skyrocketing food prices that caused unions to cost more than sirloin steak.
According to This Week in Asia, which first reported that Chinese smuggling business is ruining the economic life of farmers in the Philippines, we realize it is also ruining the reputation of China.
At a time when China should closely cooperate with ASEAN member states as the US pivots to the Asia-Pacific region, it is ironic that some short-sighted Chinese nationals are smuggling in the Philippines and making the life of its poor farmers difficult.
How did all these happen?
When Price of Onion Costs More than Steak, Something Smells Fishy
It was supposed to be a routine call from leader of a farmers' cooperative about the sorry plight of Filipino vegetable growers affected by rampant smuggling of produce from China.
But the once-vocal opponent of smuggling on the other end of the telephone line told Ernesto Ordonez – cofounder of Alyansa Agrikultura, a nationwide coalition comprising 32 federations of farmers and fisherfolk – of being "scared" and giving up the fight after receiving death threats.
"These threats are serious. They might kill," Ordonez told This Week in Asia.
Food prices in the Philippines have skyrocketed recently, with onions now selling for 720 pesos [US$13] a kilogram, up from just 60 pesos in April last year, while the same quantity of sirloin steak costs 705 pesos. Smugglers have been quick to take advantage of the public's desperation.
A combination of typhoons, pest infestations, and high fertilizer and fuel costs led to the current onion shortage, which has been exacerbated by traders hoarding supplies and farmers lacking the necessary equipment to preserve last year's harvest.
The Philippines' Bureau of Customs recently seized more than 153 million pesos' [US$2.8 million] worth of red and white onion smuggled from China that were originally declared to be fishballs.
Congressman Joey Salceda, who heads a committee with oversight of anti-smuggling efforts, earlier said he would investigate the "cabal of Chinese nations and their associates…this mafia [that] is in control of agricultural smuggling in the country at every stage of the smuggling process, from transport to arrival, to import permits and sanitary inspection".
"Intelligence sources tell us that the main characters are Chinese, or their associates," he said in a statement. "The tentacles are all over, but I am told that it is a small group, so if we can get to the core group, we should be able to pin the system down."
Raul Montemayor, national manager of the Federation of Free Farmers (FFF) said, smuggling was a lucrative business that benefited only a select few.
"Many grow rich [because of smuggling], but not the consumers and farmers," he said.
A 2020 study by the Taipei-based Food and Fertilizer Technology Centre found that some US$428 million of beef, and US$295 million of onions were smuggled into the Philippines between 1986 and 2009.
Smuggling in the Philippines is Done in Two Ways…
This Week in Asia compared two databases to examine the extent of smuggling in 2021 alone, the Philippine Statistics Authority (PSA) recorded a total of US$26.8 billion worth of imports from China. However, the United Nations International Trade Statistics Database, which compiles the import and export data of countries around the world, recorded US$57.31 billion worth of Chinese exports to the Philippines that year – a difference of US$30.51 billion.
China's agricultural and fish exports to the Philippines, minus fruits and nuts, totaled US$124 million, or 6.8 billion pesos, according to the UN trade statistics. However, the PSA recorded only 773.6 million pesos [US$14 million] of agricultural imports from all countries, including China, in 2021.
Ordonez, a former agriculture and trade official who also served as cabinet secretary for the late President Fidel Ramos' flagship programmes, attributed much of the discrepancy to smuggling, which he has fought for 18 years. He described the illegal trade as "worse now because the people are suffering". (Source: This Week in Asia, SCMP)
CONCLUSION
Smuggling, a perennial problem in the Philippines, is done in two ways. There was "outright smuggling", where goods were sneaked into the country without paying customs duties, and "technical smuggling" that was done through "undervaluation", with the value of goods understated, or good misclassified or declared to be something else, according to Ordonez.
Before assuming the presidency, Marcos Jnr had vowed that "we will run after all the smugglers [of agriculture produce]". Senators presented him with the list in July last year, but smuggling has persisted.
The problem of cross-border smuggling had started in 2002 when then President Gloria Macapagal-Arroyo created the Anti-Smuggling Intelligence and Investigation Center that year, with Ordonez appointed as its private-sector representative. And smuggling was reduced by 25 per cent. Two years later, the center was abolished after "we reported a favorite congressman and son of a cabinet secretary. I was quite upset," lamented Ordonez.
But when Duterte assumed office, the anti-smuggling committee was abolished, and customs officials no longer shared data with the private sector. Smuggling ballooned once more, Ordonez said.
The Agriculture Department's recent approval to import onions was also problematic because it would coincide with the local harvest. This means that the market would once again be flooded, enabling traders to buy local onions below their cost of production and bankrupting farmers.
"The government would allow imports to come in very cheap during harvest time, on top of what is being smuggled. It discourages farmers [from planting and innovating more," he said.
Itis clear that smuggling onions into the Philippines from China is a structural problem, involving Chinese.
The farmers and their unions have suggested that the Philippine government should discuss the perennial problem "with the Chinese government…" That way, farmers would not be forced to sell their crops to traders at giveaway prices, they said.
This seems a good suggestion as it will save the farmers and China's reputation.
The author is a freelance writer; formerly Adjunct Lecturer, taught MBA Philosophy of Management, and International Strategy, and online columnist of 3-D Corner (HKU SPACE), University of Hong Kong.
The views do not necessarily reflect those of DotDotNews.
Read more articles by Augustus K. Yeung:
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