More consultation for unity
In the midst of our pandemic and poverty crisis, what we need is to come together in unity for our people. Central to this is more consultation. For the issues on the proposed pork price ceilings and the recommended pork and rice tariff reductions, the government said they had consultations. The stakeholders claimed there were none. The truth is there were some consultations, but they were not enough, and not done in the way the stakeholders expected.
The solution is to move on. For the sake of the nation, both sides must humble themselves and start a new leaf. The government must now hold the extensive consultations the stakeholders want. At the same time, these stakeholders must put aside their grievances and provide any missing information and contribute creative ideas for a win-win solution.
Let us look at a stakeholder view. On Jan. 28, at the National Price Coordinating Council meeting, Alyansa Agrikultura proposed and got approval for a two-part resolution. First, a suggested retail price (SRP) with more flexibility to account for different retailer costs should be used, instead of a rigid price ceiling. The Department of Trade and Industry (DTI) has successfully used the SRP to penalize profiteers who have no valid reason for selling above the SRP. Second, the recommended P270 to P300 price ceiling was recommended to be recomputed with multistakeholder private sector participation. With the prevailing pork price from P300 to P440, they claim that the ceilings are just too low, and much of the pork will disappear.
The reasonable difference between the farm-gate and retail price averages P105. Therefore, the appropriate price is the current farm-gate price of P244 plus P105, or P348, rounded to P350. The profiteering by the traders selling at P440 amounts to P90 of profiteering. They are getting double what they should, and ought to be penalized.
If the P270 to P300 price ceiling is used, the only way is to have the hog raiser bring down his P244 price to P194. Given his increased costs and the African swine fever risk, he will stop production. Losses will mount and supply will shrink. Therefore, it is best to target only the profiteers.
These insights are contributed by a part of the private sector. They have not been subjected to the proper multistakeholder meeting, where some of their assumptions may be proven mistaken. In a spirit of openness and unity, the government can take the lead and call such a meeting for a win-win solution.
Another case where the level of consultation was felt to be lacking was the recommended tariff reductions. Those of pork are recommended to decrease from 30 to 40 percent to 5 to 15 percent. Rice tariffs outside the Asean (Association of Southeast Asian Nations) are suggested to drop from 40 to 50 percent to 35 percent. The multistakeholder consultation meetings may show how much cheaper the imports already are compared to our own products. So why make things even harder for them, who feel like this is adding insult to injury in their current state of already severe difficulty. Creative ways to address the problem of supply can be explored at a multistakeholder meeting so that tariff reductions may not be necessary.
In the end, it is the government that should make the final decision. But it can be done with more consultation, which has many benefits. Missing information is given, problems are understood more clearly, creative solutions are offered, and a public-private united approach is undertaken with common resolve and better commitment. Given our critical situation, this consultation and private sector partnership advocated by key Department of Agriculture (DA) officials must now be implemented immediately.
The author is Agriwatch chair, former secretary of presidential programs and projects, and former undersecretary of the DA and DTI. Contact is [email protected]
