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Farmers say supply not the issue in high agri prices

PRICES of agricultural commodities will continue to rise next year if the government fails to address the gap between farmgate and retail prices, farmers’ associations said.

“I think we will continue to have both supply and marketing problems next year,” Raul Q. Montemayor, chairman of the Federation of Free Farmers, said in a Viber message to BusinessWorld Thursday.

The Department of Agriculture (DA) has blamed rising prices of agricultural commodities on price manipulation and smuggling.

“Retail prices are disproportionately high compared to farmgate prices but DA is making it appear as mainly a supply problem,” Mr. Montemayor said.

Samahang Industriya ng Agrikultura (SINAG) Executive Director Jayson H. Cainglet said that the government should stabilize costs by getting to the bottom of the gap between farmgate and retail prices.

SINAG estimates the farmgate price of rice is at P17 to P21 per kilo; pork P160 to P180; chicken P120 to P130; corn P23 to P25; and onions P100 to P150.

The DA’s own price monitoring found that as of Dec. 28, domestic commercial rice retailed for P48 to P60 per kilo; pork P280 to P310; chicken P190 to P205; and onions P500 to P600.

“As far as we are concerned, there is no supply gap because if there is a supply problem farmgate price should increase as well,” Mr. Cainglet told BusinessWorld by phone.

Factors affecting the retail prices of commodities, according to Mr. Cainglet are logistics and importers, which “dictate the prices of products, not producers or the government.”

“Rising prices were not solely due to tight supply. They were instigated by the spike in fuel prices which spilled over to higher transport, labor, and other costs, then made worse by speculation and profiteering,” Mr. Montemayor said. 

Mr. Cainglet said the government should intervene and stop blaming producers for high prices.

“If they can get the supply directly and sell it, all the better. There are a lot of possible interventions, (like imposing) suggested retail prices, (engaging) local government units (and) big companies to buy directly from producers,” Mr. Cainglet said.

“With the right incentives and support programs, it will be relatively easy to increase production and supply. But we will have to carefully manage imports and fix the marketing bottlenecks,” Mr. Montemayor said.

As the price of onions continues to surge, Mr. Cainglet also called on the government to address the lack of cold storage particularly with the onion harvest approaching.

Further, Mr. Cainglet warned that the situation could get worse if the government continues with its “reckless policy of unabated imports” and lowered tariff rates. 

Earlier in December, President Ferdinand R. Marcos, Jr. accepted the recommendation of the National Economic and Development Authority Board to extend the reduction in tariffs for pork, corn, rice and coal until Dec. 31, 2023.

The DA has also authorized expedited imports of 64,050 metric tons (MT) of refined sugar to stabilize prices.

Negros Occidental Representative and former Sugar Regulatory Administration (SRA) board member Emilio Bernardino L. Yulo said “it will be a good start for 2023 for the sugar industry as sugar prices strongly rebounded.”

In a statement, Mr. Yulo said that the government should continue to temper consumer prices and look at the entire supply chain to determine “who is making a windfall from the high retail prices”.

“Prices have breached the P3,000 per 50LKg bag which will make it a little bit profitable for our farmers who have been on their toes in the past weeks (with) the downtrend in sugar prices,” Mr. Yulo said, adding that the current price is “comfortable enough to ease the fears among the planters.” — Ashley Erika O. Jose