There are cartels manipulating the prices of at least four basic commodities whose level of production is not enough to supply the requirements of the country.
These four commodities are rice, meat, garlic and onion and milk and dairy products.
Organised groups of businessmen have been able to manipulate the supply in the market and the prices simply because the Agriculture Department has failed to focus on efforts to increase the production level of these food items.
In spite of hundreds of millions spent for the Philippine Dairy Program, for example, the country’s dairy farmers could only produce 1% of the national requirements.
The country’s cattle population has remained at 2.5-million heads despite the decades-old Animal Dispersal Program and billions splurged in the procurement of overpriced cattle making the country dependent on imported meat.
Rice is another commodity which is vulnerable to price manipulation by cartels, especially so since the country needs to import about 800,000 metric tons every year to fill up the national consumption.
The most serious problem of supply and price manipulation is in the garlic and onion sectors.
This is mainly because of the dependence of the country for imported garlic and onion which I really believe is a situation which was allowed to prevail by previous officials of the Agriculture Department for the most despicable reason, greed.
For the life of me, I cannot still understand why the Department has failed to come up with a rational and sustainable program to develop the garlic and onion industries even when Filipino farmers have shown that they could actually grow these products.
The Philippines imports 93% of its garlic requirements and about 70% of its onion requirements.
Interventions to improve the production of these commodities have been largely token, with the Department only giving out seeds and constructing a few cold storage facilities.
How do the cartels control the garlic and onion industries?
Masquerading as farmers’ co-operatives and colluding with corrupt officials of the Department in the past, the cartels, composed mainly of Divisoria and Binondo based groups, have cornered the importation permits issued by the Bureau of Plant Industry in the past.
Since these groups have the money to finance their operations, they monopolised the cold storage facilities so that local onion and garlic farmers could not produce large volumes.
There are even accounts saying that government-established cold storage facilities are leased by the cartels on yearly basis just to deprive local farmers of storage facilities thus forcing them to sell locally produced garlic and onion at very low prices and discourage them from expanding the planted areas.
To manipulate the prices, the cartels control the volume of importation, especially during the off-harvest season of garlic and onion in China and India, the two main sources of the commodities.
For this year, for example, only 22,000-metric tons of the over 50,000 metric tons of Garlic required by the country were brought in by importers, in spite of the fact that they were issued SPS permits to cover the said volume.
The insufficient supply pushed up the prices of Garlic in the markets, prompting Senate Agriculture Committee Chair Cynthia Villar to initiate a Senate investigation.
I saw these problems when I assumed office but to expect the Agriculture Department leadership to right away eliminate the problem is to ignore the fact that age-old institutional problems require institutional solutions.
What was initially done was to link Onion and Garlic farmers with direct buyers like SM Supermarket, Robinson’s, Rustan’s, Puregold and other direct users through the Kapatid Go Negosyo program.
A loaning program is also being prepared now for Onion and Garlic farmers with a maximum loanable amount of P25,000 per hectare.
This loaning program will be started in Bongabon, Nueva Ecija where workers of the Agricultural Credit Policy Council (ACPC) and information technology experts of the Department are now accrediting farmers prior to the start of the loaning program.
Admittedly, the 2017 Budget of the Department did not carry sufficient funding for Garlic and Onion Development but it must be understood that the 2017 Budget was prepared by the previous administration.
In the 2018 Proposed Budget, a P200-M (instead of P50-M as earlier proposed) has been submitted to jump-start the 5-Year Road Map for Garlic and Onion Development.
This involves the support for traditional production areas of Onion and Garlic Production and the development of new production areas in other parts of the country.
This will include the introduction of modern technology in Garlic and Onion farming to allow farmers to plant more than once during the year.
All Garlic and Onion farmers will also be given access to the Production Loan Easy Access (PLEA) Program of ACPC which offers a maximum of P25,000 per farming household without any collateral and a 6% interest annually.
Additional cold storage facilities will also be established in the traditional production areas, including Nueva Ecija, Nueva Viscaya, Ilocos and Mindoro.
Pilot Garlic and Onion farms will be established in the Visayas and Mindanao.
By the end of the term of President Rody Duterte, the Agriculture Department aims to be able to 50% of the Garlic and 80% of the Onion requirements of the country.
When that is achieved, the Cartels will no longer be able to manipulate the supply and prices in the market.
(Photos downloaded from public websites)
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