In a bid to help stem the skyrocketing prices of fertilizers due to tight global supply, the Department of Agriculture (DA) is encouraging farmers’ cooperatives and associations (FCAs) to import fertilizers directly from international producers and suppliers to reduce the farm input’s local cost, as well as provide them additional revenue from said agribusiness enterprise.
“The idea is to allow capable FCAs to import their fertilizer requirements, and sell the surplus to fellow farmers in their respective areas,” said Agriculture Secretary William Dar.
“This is a win-win proposition for farmers because they could negotiate for lower-priced fertilizers, and engage in trading that could give their respective FCAs additional source of revenue,” the DA chief added.
For his part, Director Wilfredo Roldan of the DA’s Fertilizer and Pesticide Authority (FPA) said although fertilizer importation was liberalized in 1986 and maintained VAT exemption to cushion the price increase, very few FCAs have availed of said privilege.
Secretary Dar said that, in fact, FCAs are granted tax-free importation of farm inputs, including fertilizers, under Section 108 to 110 of the Republic Act 8435 or the Agricultural and Fisheries Modernization Act of 1997.
“This time, however, we hope big FCAs and farmers’ federations would consider importing fertilizers directly for their benefit,” he added.
“By doing so, the FCAs would get first-hand experience in fertilizer importation and trading, and learn the logistical requirements. The DA through the FPA will assist interested FCAs engage in this agribusiness venture — from registration, warehousing, to logistics and marketing,” Secretary Dar said.
“If FCAs are involved in fertilizer trading, they would know if commercial traders are overpricing fertilizers, at farmers’ expense,” he added.
Roldan said prior to allowing FCAs to import and trade fertilizers, they must first apply for product registration and license to operate with the FPA, one of the attached agencies of the DA, tasked to regulate the trade and use of fertilizers and pesticides in the Philippines.
For traditional product registration, interested FCAs must secure a certificate to import samples of the product for analysis. After passing the confirmatory analysis conducted by FPA, the company then proceeds with product registration.
FCAs eligible to apply for an importer license will also have to apply for importer, national distributor, and warehouse registration. The warehouse will also be subject for inspection by respective DA-FPA regional offices.
After undertaking these requirements, the registered FCA may then import the products and even avail of duty-free benefits by applying for VAT exemption certificate, which also serves as the Import Clearance at the Bureau of Customs.
The Philippines is a net importer of fertilizers, at 95 percent, and thus is highly dependent on international market conditions, said Roldan. The country requires an average of 2.6 million tons (MT) of various fertilizer grades yearly.
He said since May 2021, global fertilizer prices have been increasing. FPA records show that as of July 2021, the average price of imported fertilizers was at $500/MT, almost double than the $276/MT average price, from January to May 2021.
He added that fertilizer prices on the average have increased by as much as 40.5 percent (%) annually, depending on the grade, as a result of supply and demand in the international market.
Roldan said that starting October this year, the Philippines can source urea fertilizers from Brunei Darussalam, and with its proximity to the country, importers could avail of reasonable prices for said major fertilizer grade. ### (DA StratComms)
