Agriculture finally gets attention
It had to take this pandemic for agriculture to finally get the deserved attention it has long been denied. The two most critical elements during this time are health and food. Food is agriculture.
For the last six years, industry grew by an average of 6.8 percent, compared to agriculture’s disappointing 1.6 percent. This must change.
For the COVID-19, the Department of Agriculture (DA) has proposed a P31-billion budget. The proposal has provisions that should have been given in the past, even without a pandemic. This is because these kinds of support are given by other governments to their own farmers.
Examples are filling the gap for fertilizers and seeds, small ruminants and poultry, livestock and corn, coconut-based intercropping, small scale vegetable production, crop insurance and price stabilization.
Agriculture Secretary William Dar has advocated roadmaps (effectiveness), management systems (efficiency) and private sector participation (execution).
A group Dar meets monthly (now through Zoom) is the five-coalition Agri Fisheries Alliance (AFA).
During this pandemic, AFA’s main focus is supply chain management. A high priority is the broiler supply chain. Elias Jose Inciong, president of the United Broiler Raisers Association, said farmgate prices have dropped in many places to only P30 a kilo. Unless this is addressed in the next two months, the broiler industry will collapse.
However, if credit is given to poultry producers who have run short of cash because of weak demand, they can continue with a credit facility like the “quedan” system used for sugar and rice. Dar granted this request. Another supply chain concern is the increasing corruption. Some government entities recorded giving poultry raisers P60 a kilo, but actually paid only P30. That is why the Commission on Audit and the public-private provincial Agriculture and Fisheries Councils should be harnessed so the increased agriculture budgets do not go to waste.
Farmers and fisherfolk are now getting involved even in the supply chain’s import-export aspect. Since their products were not moving because of port congestion, they initiated teamwork with food processors (e.g. Philfoodex), business chambers (e.g. Federation of Filipino-Chinese Chambers of Industry) and importers (e.g. Meat Importers and Traders Association). Jointly, they submitted two sets of recommendations to the Cabinet-level Inter Agency Task Force (IATF) and got quick action. This helped solve major bottlenecks in the import and export of their goods.
There remain key action points in this part of the supply chain:
1. There are 5,000 abandoned containers occupying port space that are preventing other containers from using this space. The Bureau of Customs (BOC) must be transparent, provide this list to private sector partners, and jointly discuss these containers’ immediate removal. They can donate the abandoned goods to the Department of Social Welfare and Development and other charitable organizations.
2. There must be a guide price (GP) for port and shipping line charges. These charges should not be imposed suddenly and without private sector consultation. I was the Trade undersecretary responsible for institutionalizing the suggested retail price (SRP) concept to prevent price abuse. We had to do our homework. We first computed the possible SRP, then showed it to the producer for adjustment. We then agreed on the appropriate price (instead of completely relying on their word with no computations given). This was not price control, but a guide so that the manufacturer would not stray far from the SRP.
Port and shipping line charges should undergo the same process. They are as critical to the supply chain as retail prices are to consumer welfare.
3. Jess Cham, president of MITA, submitted this cost comparison of three alternative storage modes for a 40’ refrigerated container (see table).
The cost of the cold storage warehouse (they are now mostly full because of low market demand) is only one fourth of the port and shipping cost, while the contracted ship (which accommodates 230 refrigerated and 570 dry water containers) is one third of the cost.
With this as a reference, but using actual cost figures, a public-private body can calculate GPs for port and shipping charges. Additional charges should be discussed and not suddenly imposed, such as cleaning cost (P3,000), cleaning container fee (P3000), and disinfection fee (P15,000).
There should also be a cap on extra charges that importers are not responsible for. This happened when the BOC office was closed for 2 weeks because of a COVID-19 positive case and a 4-day E2M computer breakdown with no back up. At P20,000 extra charge per day for 18 days, the importer is unfairly charged an extra P460,000 per container through no fault of his own. INQ
The author is Agriwatch chair, former Secretary of Presidential Programs and Projects and former undersecretary of Agriculture and Trade and Industry. Contact him via [email protected]
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