DA to encourage farmers’ cooperatives to directly import fertilizer

Published October 26, 2021, 3:55 PM

by Madelaine B. Miraflor

The Department of Agriculture (DA) is coming up with ways on how to help rice farmers cope with the rising cost of fertilizer in the Philippines – one of which is to possibly encourage farmers’ cooperatives to import fertilizers directly.

In a briefing, Agriculture Underscretary Leocadio Sebastian told reporters that the DA will come up with a “holistic way” to address the rising cost of fertilizer, an additional burden to rice farmers who are already dealing with low palay prices.

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As part of the strategy that is being crafted, Sebastian said the Philippine government is planning to encourage and assist farmers’ cooperatives and associations to import directly to reduce their production cost. Aside from this, he said the DA is also considering distributing more fertilizer subsidies to rice farmers, but added that this will “require substantial funding”. “We are also looking at the possibility of setting an SRP [suggested retail price] on fertilizers if there is a noticeable gap between landed price of importer fertilizers and retail price,” he further said.

Earlier this month, John Baffes, Senior Economist in the World Bank’s Prospects Group, said that rising cost of fuel is also impacting food security in some countries.

“High natural gas and coal prices are impacting the production of other commodities and pose an upside risk to price forecasts,” said Baffes.

“Fertilizer production has been curtailed by higher natural gas and coal prices, and higher fertilizer prices have been pushing up input costs for key food crops,” he added. Based on its forecast, the World Bank expects the average price of urea this year to increase by 66 percent from US$229 per metric ton (MT) last year to $380 per MT.

In the Philippines, the price of fertilizer now averages at P2,000 per 50-kilogram bag from the usual price of P850 per 50-kilogram bag.

To make things worse for the farmers, the cost of diesel has also been increasing, surging from P19 per liter in October last year to P52 per liter during the same period this month. Right now, fertilizer accounts for around 12 to 17 percent of total production cost in rice, while fuel accounts for 30 percent of it.

Rosendo So, chairman of agriculture lobby group Samahang Industriya ng Agrikultura (SINAG), said the government must urgently find a way to bring down the cost of production in rice to ease the suffering of the farmers, who are currently bearing the brunt of low palay prices.

“What farmers are looking for is a significant drop in their cost of production and increase in farmgate price. Palay, fresh harvest, remains between P12 per kilogram (/kg) to P13/kg,” So said.

“The DA must look for ways on how to bring down the cost of production [not increase the production per se],” he added.

 
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