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Business

Looming global hunger

HIDDEN AGENDA - Mary Ann LL. Reyes - The Philippine Star

Diversified conglomerate San Miguel Corp. is embarking on another game-changing mega project.

SMC president and chief executive officer Ramon Ang has revealed plans of putting up poultry farms in 10 locations throughout the country, each growing 80 million birds a year or a total of 800 million birds.

Investment for each of the poultry farms will be around P10 billion, with another P5 billion per location for the processing facility.

At present, SMC sources around 90 percent of its chicken from its contract growers. But current supply is still not enough to meet the expected growth in demand, not only for dressed chicken but also for processed chicken products.

SMC is also looking at importing its chicken but priority will be given to local needs.

In 2021, the country’s total chicken production was at 1.74 million metric tons liveweight, 3.6 percent lower than the previous year’s output of 1.81 million metric tons liveweight. The 2020 output was 6.1 percent lower than the 1.9 million ton liveweight production in 2019.

An article in poultryworld.net noted that while pork had traditionally been the main source of protein in Philippine diets, in 2019, chicken already overtook pork for the first time in terms of per capita consumption.

It said boosted by rising income and a growing middle class, the Philippine broiler sector is set to surge.

The article explained that the growth in chicken demand has been faster than other meats due to its affordability, lower fat content, and the absence of cultural and religious hindrances. In addition, chicken is the preferred meat in fast-food outlets, a sector which is experiencing rapid expansion throughout the country.

Imports averaged 12 percent of the gross supply per year, growing from only six percent in 2009 to 15 percent in 2018, with the main imported product being mechanically deboned meat, which is used for processed meat products and which accounted for 67 percent or 192,900 metric tons of total volume in 2018.

According to the Organization for Economic Cooperation and Development-Food and Agricultural Organization, demand for all meat, including chicken, is expected to grow by 1.3 percent annually between 2018 and 2027. Aggregate chicken demand is projected to increase from about 1.4 million metric tons in 2017 to about 1.8 million metric tons by 2023, with growth drivers being income and population growth.

The article pointed out that the low per capita meat consumption of 13 kilos for chicken by Filipinos presents opportunities for further expansion with increasing purchasing power coupled with the country’s target to bring poverty incidence down to 14 percent this year from 21.6 percent in 2015.

These projections did not probably include the impact of diseases that have almost wiped out our swine population, more recently the African swine fever (ASF).

A report from the FAO dated May 12, 2022 revealed that since the Department of Agriculture confirmed the first ASF outbreak in July 2019, as of July 2021, the swine disease has spread to 50 out of the country’s 81 provinces. Meanwhile, as of March 31 this year, active ASF cases are present in 20 barangays in four provinces namely Camarines Norte, Leyte, Southern Leyte and Northern Samar as well as in seven municipalities in two regions.

FAO however said that in Mindanao, new ASF cases have recently been confirmed in Malapatan town in Sarangani province after years without new cases, and in three barangays in Banga town in South Cotabato.

A Cotabato provincial veterinarian was quoted in media as saying that 88 villages all over the province have been severely affected by the second wave of ASF that started in Dec. 2021.

ASF is a viral disease affecting pigs and wild boar with up to 100 percent case fatality rate. While it poses no threat to people, its impact on the hog population and the economy is huge due to the high mortality rate.

Last April, the DA said that active cases of ASF have been reported in only two regions, four provinces, seven municipalities and 20 barangays compared to a high of 51 provinces, 678 cities and municipalities, and 2,657 barangays recorded since 2019.

But last May 28, the Zamboanga City veterinarian’s office reported that ASF cases have been detected in five barangays.

And according to experts from SMC, it may take another three years before the situation stabilizes.

Right now, Filipinos have to contend with soaring pork prices of a much as P380 per kilo for some choice cuts, even more expensive than beef, and definitely more expensive that chicken meat.

The war between Ukraine and Russia is unfortunately making the situation worse for our food supply and prices.

With the Philippines being a net importer of agricultural products, we are now in a more precarious situation as our traditional sources of imported rice, wheat and corn are restricting their own exports.

CNBC.com reported that the war has already triggered a huge spike in wheat prices, with Russia and Ukraine among the biggest exporters of the commodity accounting for 29 percent of global wheat exports.

The International Food Policy Research Institute noted that as the war continues, there is a growing likelihood that food shortages, particularly of grains and vegetable oils, will become acute, leading more countries to turn to restrictions on trade.

India has already banned wheat exports to manage its own overall food security, becoming the latest country to do so as the price of grain surged this year due in part to the Russia-Ukraine war. In addition to Russia and Ukraine, Egypt, Kazakhstan, Kosovo and Serbia have also banned wheat exports.

Indonesia has restricted exports of palm oil. It accounts for more than half of the world’s palm oil supply.

International food experts are already warning about a potential global food crisis situation that could lead to worldwide hunger.

This is the reason why attaining food self-sufficiency is of utmost important. Our government cannot and should not treat our agricultural sector and our farmers as dispensable just because our consuming public can import everything it needs.

We should be importing only those crops that cannot be grown here. But for those that we can, like rice and corn, there is just no excuse for resorting to imports to meet demand.

 

 

For comments, e-mail at [email protected].

SAN MIGUEL CORP.

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