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Shortage

FIRST PERSON - Alex Magno (The Philippine Star) - February 18, 2021 - 12:00am

The shortage in pork, it appears, is not a momentary one. It is chronic and will take years to address.

We are now told the pork shortage could run up to 400,000 metric tons this year. Since hogs do not fall from the heavens, the only way that shortage could be addressed is by way of importation.

The pork shortage will not be solved this year. It will take many years to bring up local supply to approximate demand.

Our problems with the ASF left a deep gash in local production. As many as 5.4 millions hogs were culled the past year to contain the spread of that other epidemic. That alone caused domestic supply to drop massively and the bureaucrats in charge of the industry did not act quickly enough to address the shortage.

More important than the hog supply lost to culling, hog raisers are now fearful to invest in raising new hogs. The uncertainty about ASF raises business risks for the producers. They could be financially wiped out if the disease hits their livestock.

In the same way there is vaccine hesitancy, there is hesitancy in raising hogs. That is a complex financial, economic and psychological problem. Unless we are able to develop new means to mitigate the risks through such things as insurance programs and better biosecurity, the hesitancy will persist and domestic supply will continue to be short.

Importation is more often seen as a short-term solution. But it could become a chronic phenomenon.

Recall that other staple we import: rice. The country was once a major producer of the commodity. Today we are the world’s biggest importer of the grain. As the buffer stock of the commodity thins because of uncertain weather conditions, our food security comes into peril.

We should not readily assume that the external market would always be ready with the supply we need. The last time we direly needed to import rice, we relied on political leverage to get friendly governments to allocate for our needs.

There is something beyond the occurrence of diseases and the seasonality of severe weather conditions that explains our increasing dependence on food importation. In addition to rice, corn and now pork, we also import fish, chicken, garlic and onions. These are goods we are competent at producing ourselves if we had better, more forward-looking agricultural policies the past several decades.

The fault lies not in our stars but in ourselves, to quote from the Bard. By every measure, we should be a net agricultural exporter. Now we are a net importer of nearly everything we eat.

We have a food price regime higher than other neighboring countries. That explains high levels of poverty and malnutrition – along with their secondary effects such as poor literacy and low IQ levels (the lowest in Southeast Asia by one account).

Obviously, we need a radical reexamination of our agriculture. For decades, we maintained some sort of preferential option for subsistence agriculture and mistook this for social justice. We broke up otherwise productive plantations and subdivided them into plots that are not economically viable. We resisted mechanization and opted to use oppressively cheap rural labor, causing our production costs to rise.

In our political history, we have had strong millenarian social movements whose goal, objectively, was to keep things as inefficient as possible. These movements romanticized rustic rural life and glorified the sweet innocence of the “peasantry.” They thought the just goal of our social development was to distribute as much land to as many people, setting aside all hard-nosed calculations of economies of scale.

What this romantic interpretation of the “peasantry” accomplished was deepen rural poverty and force large migration to the cities, producing large pockets of urban poverty. So depleted has the “peasantry” become that the local communist movement has now become dependent on recruiting from the indigenous tribal communities for their cannon fodder.

The task of the next generation is to rebuild our agriculture. We need to build efficiency through mechanization and therefore integration of our farm systems. We need investments in silos and cold chains to reduce spoilage and spillage that now wastes nearly a third of produce. We need to build an efficient logistics system driven by advanced information technology that closely couples producer and consumer.

Rebuilding our agriculture will require a new, forward looking set of policies. Expect every reform policy to be resisted by the millenarians and the nativists, the neo-Luddites and the romanticists. They have all now regrouped as the political Left.

That is the long view. In the immediate term, we need to import a large amount of pork so that we can still have our sinigang na baboy and crispy pata, our lechon and pork adobo. Without all these, our lives will be miserable.

The short-term solution to the pork shortage is itself an occasion for political contestation.

Economic nationalists are resisting the lowering of tariff barriers and expansion of the minimum access volumes. They say doing these things will harm our hog raisers. But until we are able to solve the business risk outlook for our hog producers, they are not going to resume production anyway.

Our agriculture bureaucrats, on the other hand, are proposing a multi-tiered tariff barrier that will be hell to implement and likely encourage smuggling and graft.

The hard-nosed economists of the Foundation for Economic Freedom are proposing a uniform lowering of tariffs that will encourage importation in the quantity we need. That is the only viable solution if we want pork adobo on our table.

SHORTAGE
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