Just when we thought inflation had become less of a headache after hitting a six-month low of 0.9 percent in July, it’s once again a thorn in our side after it quickened to 1.5 percent in August.
This was driven by increases in the costs of housing, utilities, food and other essentials.
One way to help mitigate the problem is to strengthen the local food and agriculture industry, which in turn will improve the economy.
Flooding the local market with cheap imports will only kill our local producers.
The poultry industry is one area the government can focus on to manage food inflation.
Authorities can heed the call of the non-government peasants’ advocacy group Philippine Rural Reconstruction Movement (PRRM), which is pushing for a strategic policy shift focused on strengthening the local poultry industry.
Specifically, the group urged the Department of Agriculture (DA) to manage poultry importation in a manner that is grounded in data and sensitive to local market realities.
PRRM said in a recent position paper:
“The industry is currently positioned to gradually increase local production, with expectations of an ample domestic supply for 2026 and the years ahead.
“However, this positive trajectory is at risk if there is unrestrained importation of finished poultry products. Such a scenario would force local producers – particularly small and medium-sized farms – to cull their flocks to avoid unsustainable losses brought about by depressed farmgate prices.
“The inevitable result would be a contraction of the industry, leading to a severe under-supply in 2027 and beyond, as rebuilding production capacity requires significant time and investment.”
A policy centered on importation, the group said, does not necessarily lower or stabilize retail prices for consumers.
There’s enough data supporting this. For instance, the dressed chicken retail price in the country continued its upward trend starting July 2024 despite a significant increase in importation levels.
On the other hand, high importation levels and inventory have been shown to severely depress local farmgate prices, harming domestic producers without delivering meaningful benefits to end consumers.
It noted that any savings generated from importation may not be passed on to consumers, as intermediaries in the value chain could absorb the gains.
This observation is supported by data from the Philippine Council for Agriculture, Aquatic and Natural Resources Research and Development (PCAARRD), which reported a crisis in the poultry industry characterized by a sharp drop in farmgate prices due to oversupply and a surge in imports, even as retail prices remained high.
In November 2024, PCAARRD reported that the farmgate price for broiler chicken fell to P80 per kilo, a 43 percent drop from the previous quarter and 50 percent below the June peak of P158.94 per kilo, according to the Philippine Statistics Authority.
The DA attributed this sudden decline to a surge in chicken imports amid a shift in consumer preference back to pork.
The United Broiler Raisers Association further noted that the farmgate price of P80 per kilo was significantly below the production cost of P105 to P110 per kilo.
This means substantial losses of P25 to P30 per kilo for local producers, according to the PRRM paper.
Against this backdrop, retail prices continued to range from P150 to P220 per kilo.
This created a price gap of P70 to P140 per kilo, which underscores a severe disconnect between farmgate and retail prices.
What does this mean? This, PRRM said, highlights inefficiencies in the supply chain and raises concerns about fairness, transparency and the equitable distribution of value among stakeholders.
“Considering these developments, the local poultry industry strongly reiterates its request for the DA to manage poultry imports in a manner that is informed by accurate data, sensitive to prevailing and projected market conditions and supportive of the industry’s long-term viability with the goal of managing food inflation through a strong local poultry industry,” it said.
Moving forward, industry players are also requesting data on actual and forecasted demand and consumption of poultry products, actual and forecasted local poultry production and actual and forecasted poultry import volumes.
Timely access to this information is vital for stakeholders to make informed decisions regarding production, inventory management and market strategies, they said.
Feed and poultry inputs
Regarding feed and poultry inputs, PRRM said the industry calls for the implementation of policies designed to address critical challenges that impede production growth, particularly the shortages of yellow corn and hatching eggs.
“These shortages have led to increased costs and have consequently slowed chicken production,” according to the paper signed by PRRM president Edicio dela Torre.
Lessons from rice importation
Lastly, PRRM said the industry strongly advocates for the implementation of a policy for the poultry sector similar to the recently announced suspension of rice importation, aimed at protecting local farmers currently struggling with low palay prices during this harvest season.
“Decisive interventions are essential to address and prevent the crisis outlined in the PCAARRD report. Moreover, proactive measures, such as the rice import suspension, are critical for sustaining the agricultural industry – particularly poultry – since recovery from the adverse effects of oversupply and excessive importation requires a considerable amount of time,” PRRM said.
Helping the local poultry industry would allow it to continue supplying the country with safe and high-quality poultry products.
And this, the advocacy group said, requires a balanced approach to import management – one that protects local producers, ensures fair market practices and ultimately benefits Filipino consumers.
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