The government should strike a balance between boosting domestic production and filling in the supply gaps to ensure that agriculture stakeholders are not put at a disadvantage. The key is to bring down the cost of inputs to make local producers competitive.
Livestock growers, particularly pork and chicken, continue to feel the pinch of the global crisis while consumers are also bearing the brunt of more expensive food in the market.
President Marcos, who is also the concurrent Agriculture chief, recently met with several agriculture stakeholders to listen to the problems hounding the sector.
The high costs of inputs in the global market as well as trade issues amid the still ongoing war are making it difficult to secure supply, which in turn, are driving up prices on the domestic front.
Chris Ilagan of American Chamber of Commerce Agribusiness Committee Chairman says that “The higher feed costs lately may have also impacted profitability at the farm level, which may have affected decisions of some broiler growers to lower production levels.”
This is particularly true after inflation sizzled to another four-year high of 6.4 percent in July from 6.1 percent in June. This is largely due to more expensive food items especially meat, fish, sugar, and other baked products. Local yellow corn production in the last year only reached an estimated six million MT which was short of the over nine million MT total demand. Historically, the Philippines has produced an average 7 Million Metric tons a year and has not met the total growing demand of the livestock and poultry sector.
The Foundation for Economic Freedom earlier floated the idea that the government should abolish the quantitative restrictions on corn, pork, chicken, sugar, and fish as this will go a long way in reducing food prices. This is especially true for corn as local producers want to import because the shortage of inputs, not the finished product, helps to avoid economic displacement.
National Federation of Hog Farmers Inc. president Chester Tan said the plan of reducing the tariff and increasing the minimum access volume, which was the strategy of the Duterte administration, did not work as inflation remained high for the finished products.
“In our meeting with President Marcos, we agreed to organize a working group with the Department of Agriculture and private stakeholders to meet monthly to discuss demand and supply figures and find the gaps that may be filled in with importation,” Tan said.
“Certainly, our group will not oppose importation but it must be a reasonable quantity that will allow farmers to still earn and encourage them to produce more. Food security and food self-sufficiency is a common goal for all of us,” he said.
Non-government organization Philippine Rural Reconstruction Movement (PRRM) echoed the same sentiment saying that in theory, bringing down tariffs and increasing the import volume for various commodities should pull down prices and slow down inflation.
But PRRM president Edicio dela Torre argued that there has not been any significant reduction in prices, despite the increased imports in the past months.
“I think it is fair to ask if more of the same policies will deliver different results,” dela Torre said. “The policy bias is in favor of importers and consumers, although government officials pay lip service to the strategic importance of supporting domestic production and domestic food systems,” he said.
Dela Torre maintained that reducing tariffs also reduces government resources supposed to be used to support domestic producers and mitigate the negative impact of importation on them.
United Broiler Raisers Association president Elias Jose Inciong, for his part, said that the government should not do such a thing as farm gate prices have already collapsed due to excessive importation.
Based on market monitoring of the DA, pork is now priced at P325 to P380 per kilogram while chicken is at P190 a kilo. A month before, pork prices are slightly higher at P340 to P390 while chicken at P200.
“Retail prices are relatively inelastic compared to farmgate prices. It is priced at cost plus while agriculture products are commodities priced based on supply and demand,” Inciong said.
Tan, on the other hand, said local livestock producers are backing out and are less confident to produce more.
“They fear that our economic team will give priority to imported products over local produce or maybe give more support to importers than supporting the local farmers to produce more,” Tan said.
“In short, local stakeholders need security and assurance. We need safeguards, that after we produce any agricultural products, it should not coincide with importation. If it’s the season of shortage, we will not argue,” he said.
Tan added that many products are not being sold when there is an oversupply of any commodity.
But Dela Torre did not dismiss the fact that imports are necessary, in the short term, but policies should be based on reliable and timely data and projections of domestic supply and prices vis-a-vis global supply and prices.
“Also, instead of a one size fits all policy, the government should look into specific commodities and systems, since it needs appropriate policies for production and imports of commodities,” he said.
Moving forward, dela Torre emphasized that the long-term solution is a combination of policies and public investments for increasing domestic production and supporting integrated food value chains.
He said the support and incentives to producers must be accompanied by education campaigns for consumers to appreciate the advantages of domestic food sources, especially in food safety.
In its latest statement after the inflation print hit 6.4 percent, the National Economic and Development Authority has not mentioned, at least for now, any move to bring in more imported agriculture commodities.
To boost local food production, Socioeconomic Planning Secretary Arsenio Balisacan said the government will continue to support the agriculture sector through lower input costs, development of new farming technologies, extension of financial assistance to farmers, and strengthening the agricultural value chain. PR