The Department of Agriculture (DA) is exploring the prospect of buying pork and directly selling the commodity to retailers, allowing the agency to cut through potential layers of profiteering as pork prices continue to rise.

DA Secretary Francisco Tiu Laurel recalled that during his meeting with the pork industry on Tuesday, Feb. 18, the state-run corporation Food Terminal Inc. (FTI) bared this plan to help stabilize prices.

“Plano ng FTI bumili ng pork from our local producer and distribute it to the retailers para mabawasan ‘yung layering and of course, para makita rin ng gobyerno kung ano ba ang detalye ng trade na yan,” Laurel said in a chance interview on Wednesday.

(FTI plans to purchase pork from local producers and distribute it to retailers to reduce layering and, of course, to allow the government to see the details of this trade.)

The FTI, an attached corporation under the DA, is allowed to purchase pork under its mandate of stabilizing the prices of goods.

“We want to use that as leverage in the market if there is indeed some unfair prices around, we will intervene by importing our own kasim (pork shoulder) and pigue (ham) and sell directly to retailers and Kadiwa [stores],” said Laurel.

The development comes after pork producers, traders, and retailers expressed opposition to the proposed maximum suggested retail price (MSRP) on pork.

The DA chief noted that he would abide by this request once the pork industry, as a whole, agrees to offer “better prices” for consumers.

“Kung hindi natin makuha yung tamang presyo (If we cannot obtain the right price), fair to all parties, we may issue an MSRP or a maximum wholesale farmgate price, actually,” he pointed out.

Laurel said the plan to purchase pork, to then sell them, is also still in the air based on the industry’s adjustment of prices.

He added that the government would be forced to intervene, if price reductions are insufficient.

When asked for an estimate of the ideal price for pork, Laurel remained tight-lipped, although he hinted that the ₱250 farmgate price is above what the DA prefers.

Based on the agency’s latest monitoring, imported frozen pork is currently priced at around P250 per kilo, while local pork is sold at over P400 per kilo.

Finding the balance

A potential MSRP on pork was first floated around early this year after reports that profiteering is possibly behind the rise in pork prices.

Laurel himself was quoted as saying that the price cap would be imposed once profiteering is identified to be the culprit.

It appears that this is no longer the case following the secretary’s assertion that the high prices are just part of the “natural course of business.”

He told reporters that the upsurge in prices, from hog raisers to retailers, is a direct consequence of the highly contagious African swine fever (ASF).

“Dati kasing nalugi ang karamihan dahil sa ASF eh, so ngayon ang mga farms gustong bumawi nang kaunti para makapag-repopulate rin naman sila,” the DA chief said.

(Most farms suffered losses before due to ASF, so now they want to recover a bit to help them repopulate.)

“So, we just have to find the right balance. And mukhang willing naman ang mga pork producers (And it looks like pork producers are willing) to go back to their figures, computation of cost and profitability, and come up with a win-win situation for all,” he continued.

In a statement on Tuesday, Laurel announced that pork producers, traders, and retailers have agreed to review their cost structures to help ease the cost for consumers.

The cost imposed by viajeros or traders, in particular, is under review since they are estimated to add ₱80 to the retail price of pork per kilo.

The pork industry is also awaiting the commercial availability of the vaccine against ASF, which is expected to drive prices lower.

The DA’s Bureau of Animal Industry (BAI) is anticipating an approval for this vaccine from the Food and Drug Administration (FDA) after it yielded positive results.

The vaccine, according to Laurel, will not only lead to repopulation of pork but it will also convince the return of investments in the industry.