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Business

Food problem

DEMAND AND SUPPLY - Boo Chanco - The Philippine Star

The decision of Junior to assume the agriculture portfolio is a brave one. That means the buck really ends with him. There is no underling to blame for failure, and the risks of failure are big in today’s environment.

We may not be feeling it yet, but there is a global worry about food availability and escalating food prices. What is happening in the world of food today is important to us because we cannot survive without food imports.

It isn’t just about rice or even wheat for pandesal. A few days ago, I read a Facebook post complaining about the scarcity of chicken at Jollibee. A fellow columnist from another newspaper went to her nearby grocery and found the price of chicken has escalated significantly since her last visit.

The other fast-food chain, McDonald’s, was reported to have suffered from shipment delays and a shortage of potatoes used to make its French fries. The company has been rationing its fries in countries like Japan, Taiwan, Malaysia, and Indonesia.

Last week, McDonald’s Philippines announced it would only offer regular size fries, halting the sales of its large-sized portions.

I asked a friend, who is in the business of supplying various food commodities including chicken, what is going on. Here is his reply:

“High input costs (raw materials, especially feeds) coupled with weak loading in previous months due to price signals led to lower growing cycles. With prices picking up, poultry raisers are now starting to reload, but it will take some weeks before we start feeling that in the market.”

Apparently, the cost of chicken feed isn’t chicken feed anymore. We don’t grow enough corn, a basic ingredient for chicken feed.

“Chicken feed prices are up. Chicken diets are largely corn based. But local corn supplies were inadequate, which caused a spike in local prices.

“And until a couple of weeks back, tariffs on corn were 35 and 50 percent in-MAV/ex-MAV. This was brought down to five and 15 percent due to EO 171, but MAV volumes remain unchanged at just over 200,000 MT when the local deficit is closer to three to four MMT. (MAV is the minimum access volume that refers to the volume of a specific agricultural product that is allowed to be imported with a lower tariff as committed by the Philippines to the World Trade Organization (WTO) under the Uruguay Round Final Act.)

“The ex-MAV of 15 percent remains quite high still and so only those with MAV allocations have started importing… but it won’t move the needle much until the MAV volumes are increased.

We have to import more corn or more chicken or both.

But pity the Singaporeans. They are almost totally dependent on Malaysia for their supply of chicken, and Malaysia just banned any export of chicken because production has been disrupted by a global feed shortage.

Now the Singaporeans are being deprived of their favorite chicken rice dish. They are apparently horrified even at the thought of using frozen chicken for their “national dish.”

I hope Junior’s decision to personally lead the agriculture department is more than a symbolic act to tell us that he hears our problems. Unfortunately, there won’t be any quick solutions available for a festering problem past administrations failed to address.

For me, I will believe Junior means business if he goes for the suggestion of the outgoing acting agrarian reform secretary to consolidate land and achieve the economies of scale needed to increase yields and bring down the price of rice.

It is the most revolutionary thing I have heard coming out of the agrarian reform department. I hope Junior’s agrarian reform secretary has creative ideas to get farmers out of poverty, not just distribute land titles.

The current land reform program just makes farmers poorer every year since their small plots of a few hectares can hardly produce enough rice for their own needs.

Maybe Junior can make his agrarian reform secretary concurrently in charge of agriculture, with a mission to increase rice productivity to help farmers and also benefit the consumers.

With his large political capital, Junior can afford to displease the noisy groups supporting agrarian reform as it is today. Of what use is a land title if a farmer can’t even feed his family?

In any case, Rep. Joey Salceda observed that the Vietnamese government does not support their rice farmers as much as we do – yet far outdoes us in farm performance. Vietnam is even taxing the farmers for exporting their produce.

Our government on the other hand, has perennially procured farm inputs like fertilizers to pass on cheaply to farmers (at taxpayers’ loss and the corrupt agriculture officials’ gain).

Salceda: “Our problem has been that the government has focused support on private goods or direct farm inputs, where the benefits last for only one crop season, but falls short on public goods with long-lasting benefits like irrigation, postharvest facilities, transport, and logistics.”

On the other hand, economist Ciel Habito, a former NEDA chief, rejected claims that “unbridled liberalization” in agriculture has penalized our farmers since we joined the WTO.

“In truth, we had precisely bridled trade in farm products with various waivers, exemptions, and ‘sensitive lists’ that persisted for decades, especially for vital food products like rice, corn, meat, and vegetables. Look where we are now in these commodities.”

How serious is Junior in fixing our food sector? That’s to be tested. Will he go after the food cartel, the middlemen benefiting from the current horrible situation that sacrifices farmers, consumers, and taxpayers?

The other week, I saw a Facebook post about a farmer from a northern province who dumped his truckload of tomato harvest by the roadside because he couldn’t sell. Yet the price of tomatoes in NCR remains high.

The Department of Agriculture must support farmers through the entire process – from planting, to harvesting and taking their produce to market. This is basic, but has not been done through the decades.

President Junior has taken on a personal challenge to provide food for every Pinoy. We should support and cheer him on. Our tummies are banking on his success.

 

 

Boo Chanco’s email address is [email protected]. Follow him on Twitter @boochanco

FOOD

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