Rotten tomatoes

It happens like clockwork every year. Farmers tearfully trash their harvests of tomatoes, cabbage and other vegetables because they can’t sell to recover the cost of planting. The price offered by traders at the farmgate is less than the cost of the crate.

This makes taxpayers wonder what their government is doing to help those poor farmers. You don’t have to be an agri-business expert to know that this tragedy keeps on happening because of an acute lack of post-harvest infrastructure.

Vegetables like tomatoes spoil in days. Without cold storage, farmers have no “buffer” to wait for better prices; they must sell immediately or lose everything.

The DA claims to be building 99 cold storage facilities across the country, focusing on key production areas like Nueva Ecija and Benguet to extend the shelf life of vegetables. But not fast enough, it seems, or not happening at all beyond press releases.

Post harvest loss is a serious problem. For rice and corn alone, the agriculture department estimates an annual loss of roughly P10.7 billion.

The problem is aggravated by farmers who often decide to plant the same crop simultaneously (like tomatoes or cabbage), flooding the market at harvest, causing prices to crash.

I am told that this recurring problem is a consequence of devolving agricultural technical assistance to local governments that have no desire or expertise to give farmers proper advice before planting.

Post-harvest loss is a factor in food shortages that cause food inflation.

For us, food inflation has always been a serious economic problem. It is like a regressive tax on most of our people and it causes hunger and malnutrition. Our lower economic classes spend up to 60 percent of their household budget on food.

And dealing with that is the responsibility of BBM and his agriculture secretary. The BSP Governor has more than once emphasized that monetary policy has limits against food-driven inflation. He has politely talked about “supply-side pressures” and market distortions and inefficiencies that BBM must fix.

Unfortunately, the knee-jerk response of BBM and our past presidents is to impose price control. And price control makes the food cartel withhold supply, causing more price increases or shortages.

A recent Facebook post (Behind Asia) describes price control’s terrible impact on poor market vendors selling rice.

“Thousands of small market vendors had already purchased their rice inventory from the cartel weeks prior at wholesale prices of P48 to P50 a kilo. When EO 39 took effect overnight, these small-time vendors were legally forced by the state to sell their rice at P41 a kilo.

“The government mathematically mandated that the poorest retailers in the supply chain absorb a massive financial loss, bankrupting thousands of micro-businesses in a matter of days.

“And what did the actual cartels do? They simply stopped releasing rice. They locked their warehouses, choked the supply even further and waited for the political theater to end.

“The economic theory sold to the public was simple: open the borders, let cheap Thai and Vietnamese rice flood the market and local prices will drop. The macroeconomic reality was a masterclass in cartel manipulation.”

If farmers are helped with proper logistics and market information, they will not be at the mercy of traders. But for now, by the time rice gets to the market vendors, its price would have been pegged by what looks like a cartel of rice traders who control prices better than the DTI.

Francisco Tiu Laurel Jr., the Secretary of Agriculture, says there is no rice cartel despite retail prices remaining high after tariffs were slashed to 15 percent from 35 percent.

And so, the landed cost of imported Vietnamese rice was roughly P28 per kilo in early 2025, but retail prices often remained significantly higher (above P40–P50).

Sec. Laurel justified the higher rice retail prices by saying traders were still disposing of old stocks purchased earlier at higher tariff rates.

That’s an inventory risk traders should take. It is a risk oil companies take. Clearly, the secretary was more protective of the financial interests of the traders over those of consumers and farmers.

There may not be a cartel in the economics textbook sense but there are definitely middlemen or “hoarders” who were given by the DA the right to import. They are obviously capturing the profit from the decreased tariff rate and lower import cost from Vietnam instead of making consumers benefit as was the DA’s publicized intention.

Worse, allowing favored traders to import cheap rice at an inopportune time crashed the farmgate price that bankrupted the poor farmers. The traders just hoarded the cheap Vietnamese rice in their warehouses to choke supply and keep retail prices high to the detriment of consumers.

Did Sec. Laurel raid any of these warehouses at the time? Of course not.

If BBM and Sec. Laurel were serious in controlling food prices, they would have used the police powers of the state to dismantle the layers of traders that cause our food inflation.

Then again, the traders are providing the agricultural infrastructure the government failed to provide.

UA&P professor Victor Abola recently reported their research findings that multiple layers of middlemen, often ranging from five to as many as seven or eight, are a primary factor in the high cost of food in the Philippines. The problem, Dr. Abola said, is not just production but distribution.

They did an experiment that connected an agricultural cooperative directly to restaurants, hotels and large supermarkets in Metro Manila through a digital platform, bypassing the chain of middlemen.

Dr. Abola said that “by bypassing middlemen, they expanded their capacity by 30 percent.”

Food supply chain inefficiency had been driving up inflation long before the Hormuz oil price shock.

Next time, farmers should put their rotten tomatoes to good use. They should throw them at our officials to shame them into fixing the real problem in the supply chain.

Boo Chanco’s email address is [email protected]. Follow him on X @boochanco