Gap between farm-gate, retail prices of farm produce widening
The disconnect in the agriculture industry’s value chain continued to worsen in 2019 as the gap between farm-gate and retail prices of agricultural commodities further widened, benefiting mainly the traders.
The Philippine Statistics Authority (PSA) released a report on the prices and marketing of agricultural items for the past five years, which covered 22 items.
Based on the agency’s collated data, the gap between farm-gate and retail prices for these items range from 20 percent to as much as 392 percent.
Despite efforts of the Department of Agriculture (DA) to increase farmers’ participation in the entire chain beyond production, the producers’ share in the final prices still fluctuated during the five-year period, giving traders more bang for their buck.
In 2015, the farm-gate and retail price gaps for well-milled and regular milled rice stood at 59 percent and 40 percent, respectively. In 2019, the gaps widened to 70 percent and 50 percent.
However, farmers received only 59 percent and 66 percent of these prices against 63 percent and 72 percent in 2015. Except for banana, pineapple, chicken and chicken eggs, farmers’ earnings from the rest of the monitored commodities decreased.
The markups slapped by middlemen are even more glaring in other products like matured coconuts (392 percent), Hawaiian pineapples (391 percent), cabbage (273 percent), tomato (194 percent), beef (172 percent), green mangoes (159 percent), calamansi (156 percent), potatoes (141 percent) and eggplants (135 percent).
The lowest margins were observed in chicken and duck eggs at 20 percent and 31 percent, respectively.
The farmers’ share in the final prices of these products range from 20 to 83 percent.
Ramon Yedra, director of DA’s agribusiness and marketing assistance service, said there was no formula in determining the ideal margin for every product.
He said markups imposed by traders were usually driven by market forces including the supply and demand, and the effects of natural calamities.
Vegetable prices are usually dictated by their seasonality.
“We monitor the retail prices. When we see an unusual uptick, we look at the reasons to determine whether the products are judiciously priced or there is a need to intervene,” Yedra said in a phone interview. “We cannot give an ideal markup because it varies for every commodity.” INQ
