A corny problem

Last week, I had the precious opportunity to spend a long weekend with my family in an out-of-town trip up north. I enjoy a lot these rare chances of getting out of Metro Manila and driving through the countryside. Since I do not know how to drive a car, I sit it out throughout the long travel at the passenger seat. Thus, my full attention was on the scenic view along the way. I still marvel at the sight of the vast expanse of rice and cornfields, as if this was my first time to see these crops up close.

Deep in my thoughts on other things, I suddenly had the urge to stop at the roadside upon seeing the steaming boiled sweet corns being sold along the roadside. The few minutes of stopover we had just to buy the sweet corns was turned into a quick crash course on the subject of corn. This was when the very articulate vendor whom I got to know only by the name Aling Siony started complaining about corn prices. This was after I haggled with her about the price of corn that she was selling at P15 each.

As I gathered, unscrupulous traders are again at it, and are the ones behind the high prices of corn. It appears these traders hoard the corn they buy from small corn growers to create an artificial shortage and thus put a squeeze on local corn supply. In the end, we, consumers pay for the more expensive corns even as there is adequate supply here in our local markets.

More adversely affected by this situation are those engaged in the livestock and poultry business, corn feed producers, and the other industrial consumers of corn. Sensing that I am like any typical housekeeper, Aling Siony was telling me that the higher prices of corn is the reason why up to now, more than four months after the seasonal high demand during Christmas, the price of dressed chicken in the market have not gone down from P100 a kilo.

To ease the supply problem on local corn, government can start clamping down on hoarding and obvious attempts of price manipulation to protect consumers from this kind of traders. In the meantime, the government-run National Food Authority (NFA) has reportedly imported more corn to narrow the supply-demand gap. This will help ensure prices to remain competitive for both local corn growers and end-users and avert further inflationary push detrimental to us consumers.

There is an industry-projected shortfall in corn supply at 1.8 million metric tons (MT) this year. It’s a good thing the government stepped in this early, though, temporarily, by importing an initial 120,000 MT to augment supply. The Department of Agriculture (DA), through the NFA, conducted this successful bidding of imported corn — 120,000 MT that will arrive in the country in two batches — one in June and one in July to initially cover the expected corn production deficit. It was reported that the NFA board gave a contingent approval for additional importation of 280,000 MT in case of additional shortages and to serve as buffer stocks for the upcoming lean months. However, noble as the NFA corn importation was, this will be nothing short of a stop-gap measure. If nothing drastic is undertaken, we will perennially be at the mercy of imports.

It is not as if we consumers and these big corn users are helpless to address this problem to neutralize these nefarious activities of unscrupulous big traders and the so-called cartel in the corn industry. End-users can always exercise the option to buy directly from the farmers. It may not be initially feasible but once the government puts up the needed infrastructure in place, the process of buying and selling the commodity will be more cost-efficient and fair for all its stakeholders.

Over the long-term, the key to ensuring steady price of corn, and food sufficiency in general, is raising the domestic production. Unfortunately, some of these yield-improving measures involve capital outlays and huge sum of money that the government must shell out to help our farmers. DA Secretary Arthur Yap earlier cited that the government is spending this year as much as P3 billion for the repair and construction of irrigation systems all over the country which is double the amount from the previous year’s budget.

However, because it is election season now in the country, the government funding for these irrigation projects is being politicized. We can’t blame our politicians since the dark shadow of the multi-billion peso fertilizer scam allegedly used during the May 2004 presidential elections is still fresh in the minds of our people. I am glad we have re-electionist Senator Edgardo Angara, who himself served at one time as Agriculture Secretary and a farmer by heart, has taken up the cudgels for our farmers. We need Angara back at the Senate to continue his vision for the Filipino farmers that would lift their plight out of poverty. As his campaign song goes, "Ang-gara ng buhay mo kay Angara."

Other than irrigation, farmers, of course, need working capital for seeds, fertilizers, and other farm inputs. While there are cooperatives that serve this function, plus the Agri-Agra Law instructing financial institutions to allot funds for agriculture, the bottom line is that the cost of these available funds admittedly are still too high for farmers to avail of. Given the turnaround of about two to three months for each crop season, farmers, more often than not, resort to borrowing money at the usurious rates from the so-called ‘5-6’ lenders. Angara vows to put an end to this vicious cycle that has trapped Filipino farmers for decades.

As soon as these measures have been instituted, Angara pointed out, this would at least help boost our country’s agricultural production, which still comprise a good 20% of our gross domestic product and consequently improve the lot of Filipino farmers. Later on, increased farm incomes will translate to higher consumer spending, close to 40% of the country’s labor force which is still agriculture-based. In the end, the economy can achieve a faster growth rate and higher stage of development. Sounds so simple but this is how these economic theories should work.

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