Manipulated Market! ‘Laissez Faire’ Won’t Work In Nation Of 7,000+ Islands

As I push with the advocacy for government action to correct a flawed market system in the country, not a few disciples of the “Free Market System” or “Laissez Faire” have taken me to task and accused me of not understanding how free market works.
Well, in theory they may be right but in reality they are literally millions of light years away from the truth on the ground, at least in as far as the Philippine marketing system is concerned.
They have even failed to realize that the Philippines is a country of over 7,000 islands and moving goods and people from one island to another costs a lot, especially when typhoons and tropical storms would stop travel.
Just like the authors of the greatest legislative blunder which affected agriculture, the Rice Tariffication Law, they naively believed that by flooding the market with a commodity like rice, the prices will go down following the “law of supply and demand.”
What they have not considered, however, is the fact that in the Philippines, the trading and marketing of basic goods, including critical food commodities, are controlled by traders, middlemen and the cartel who own trucking companies, shipping lines, post-harvest facilities, warehouses and even commercial outlets.
Thus, from the farm gate to the kitchen of the Filipino families, a P15 per kilo Carrots in Benguet or Bukidnon would be sold for over P100 per kilo in the big market simply because the product goes through at least 5 to 6 hands of middlemen or traders.
The trading and marketing could not be left to the private traders and middlemen because they have no concern over the prices of the commodities.
If the supplies come from places where are too distant for them to make profit, these traders will never venture buying products from farmers and fishermen in those areas.
Perfect example is the recent “Rescue Buying” of the Department of Agriculture (DA) of the 25 ton garlic of farmers in Itbayat, Batanes, the rotting tomatoes of Nueva Viscaya, the unsold vegetables from Benguet and the Papaya in South Cotabato which are fed to cattle when these are not sold.
Only government could correct this flawed market system and this could be done by offering an alternative route for these basic food commodities to reach the kitchen of Filipino families from the farm gates.
There were proofs of concept which were implemented when I was Agriculture Secretary and when I headed the Mindanao Development Authority, the DA Tienda and the MinDA Tienda, which brought farmers’ goods to the big cities and sold at lower prices.
Even in my private capacity now and with the help of former Senator Panfilo Lacson, we are launching the Modified Barter System between the land-based and coastal-based farmers of Cotabato and Kabasalan, Zamboanga Sibugay which would be marked by the trading of products from both areas.
As Food Security Adviser to the NSA Secretary, Prof. Clarita Carlos, I had already submitted a recommendation for the revival and reactivation of the Food Terminal Inc., a government owned and controlled corporation under the National Food Authority (NFA).
The FTI, established 58 years ago to ensure stable food supply for Metro Manila, could expand its coverage and open up buying and food consolidation centers in the rural production areas focusing only on the most basic needs of Filipino families.
These commodities could include Rice, Fish, Chicken, Pork, Beef, Vegetables and Fruits which could be supplied by farmers and fishermen who will be engaged by FTI in a production contract.
The FTI could either bring these goods to be sold in the People’s Food Markets to be established in the big cities or reposition these in provinces where these are in short supply.
This strategy would end such distress stories as the unsold Garlic of Itabayat, Batanes, the rotting tomatoes of Nueva Viscaya and the excess vegetables of the Cordillera.
As I have mentioned in previous posts, this market innovation would not cost the government much because NFA already has buying stations all over the country and all that is needed would be stand-alone cold storage facilities and packaging facilities.
Government does not need to invest in logistics equipment because there are existing privately-owned modern trucking services with refrigerated and reefer vans who could move the goods around the country at the lowest possible cost.
If there are available funds, the government could implement my proposal when I was Secretary of Agriculture to ask the shipbuilders of Navotas or Cebu to build refrigerated boats which I proposed to be called “The Food Boats” to sail to island provinces like Tawitawi, Sulu and Basilan to pick up fresh fish to be brought to the consumers centers.
This is not market intervention but market facilitation which I believe is what government should be doing.
I call this Common Sense Governance!
#GovernanceIsCommonSense!
#KungGustoMaramingParaan!
(Photos of the truck logjam in Matnog, Sorsogon and the BFAR owned MMOV built in Navotas were downloaded from public websites.)