Onion prices make poor Filipinos cry

DUBAI is not an agricultural Emirate state, although the rising demand for premium organic foods in Dubai has recently increased the scope for agricultural business there for vegetable crops like tomatoes, cabbage, eggplant, squash, and cauliflower. as of December 30, 2022, Filipinos in Dubai reported that they can buy one kilo of onions for the equivalent of P31.

The Philippines is an agricultural country. As of December 30, 2022, consumers in Divisoria market, supposedly the place where one can buy cheaper goods, complained that the price for a kilo of onions has skyrocketed to P600.

What is happening to bulb onions in the country is also happening to sugar and other food products. This is not the best way for Filipinos to welcome 2023. Rising food prices will result in related items becoming more expensive. If the people’s access to food and other basic products becomes limited as a consequence of high inflation, the nation’s food security will be compromised.

The late President Ferdinand E. Marcos understood the dynamics of the Philippine market system, where middlemen and big traders can potentially control the country’s agricultural produce. That’s why he made it his priority to establish the Food Terminal Inc. in 1968 for the purpose of stabilizing prices of commodities through an efficient agricultural marketing system, particularly in Metro Manila.

FTI sought to restructure the country’s agricultural sector by establishing a food consolidation center. The company’s major activities include warehousing, food processing, research and quality control, marketing services, and trading.

In November 2012, the Philippine government announced the sale of 74 hectares of the 120-hectare FTI property to Ayala Land Inc. for P24.3 billion. The area became Arca South, an integrated mixed-use development that features residential blocks, office buildings, and commercial areas. The remaining 46 hectares are still owned by FTI. Proceeds from the sale of the 74-hectare property were pledged to the programs of the Department of Agriculture and the Department of Agrarian Reform.

In a Facebook post, former Agriculture head Manny Piñol said there’s a need to reactivate the FTI, which is now under the National Grains Authority. His fourpoint proposal: 1) Identify the basic food commodities that contribute largely to food inflation (he cited five: Rice, fish, meat, vegetables and fruits). 2) Establish FTI buying stations and cold storage facilities in the country’s agricultural production areas by using existing NFA buying stations and just adding stand-alone cold storage facilities. 3) Engage farmers, fishermen and local producers by giving them a quota of the volume of specific commodities that FTI will buy with a guaranteed price. 4) Open FTI food outlets in the urban centers, especially Metro Manila, Metro Cebu, Metro Davao and Baguio City, which will sell the goods consolidated from the FTI Buying Stations all over the country at prices with a minimal mark up to cover the operational costs and ethical profit to keep FTI viable.

Hindsight has the power of clarity. Although Piñol may have disappointed the Filipino consumers himself during his DA stint, he did establish the Tienda program, which sold agriculture products in Metro Manila and Baguio City at farm gate prices. This marketing strategy sought to lower food prices by eliminating layers of middlemen in the supply chain, consequently increasing farmers’ and fisherfolk’s income and providing them market opportunities.

To address the soaring prices of onion, the Department of Agriculture issued an administrative circular on December 29 increasing the suggested retail price of red onions to P250 per kilogram. The new SRP will remain in place until the first week of January 2023, after which the price will be evaluated in another stakeholders’ consultation.

The Federation of Free Farmers Cooperatives Incorporated has urged the government to look beyond setting a suggested retail price to address skyrocketing red onion prices. “Setting an SRP will not solve the problem. Traders will not follow it, and the DA will not be able to enforce it,” said Raul Montemayor, FFFCI national manager. He said the DA should focus on increasing local production while also curbing profiteering and price manipulation in the market.

It would do well for the government to look not merely at the immediate but at the longer effects of economic policies affecting farmers and consumers. The challenge is how to transform Philippine agriculture into a dynamic, high-growth industry to strengthen the country’s food security and help create a vibrant rural economy.