‘Price crash’

We keep hearing about prices of agricultural commodities falling at the farm gate. So how come retail prices at least in Metro Manila don’t follow the fall?

The government seems unable to identify who along the supply chain makes a killing when farmers groan about prices of their crops hitting rock bottom while retail prices register only minimal reductions.

Egg prices, for example, have “crashed” at the farm gate, according to poultry producers. As of last Wednesday, the P270 that I used to pay at the start of the year for a tray of 30 jumbo (the largest) eggs in our neighborhood wet market was down to only P250.

That’s a reduction of 70 centavos per egg, from P9 to P8.30 each, but still not close to the P220 that I used to pay per tray of the same size in mid-2023, or P7.30 per piece. Yesterday there were eggs at P6 per piece in the wet market, but these were of the smallest size.

Any price reduction is welcome news, but I would hardly call it a “crash” in egg prices. The producers must be referring mainly to the farm gate prices, which are rarely reflected in the retail outlets.

Since the importation of tons of sugar failed to significantly bring down the retail price of white refined sugar last year, even as domestic producers lamented the fall in mill gate prices, people have wondered where the mega profits are being made along the food supply chain.

Retailers say they peg their price based on how much they pay wholesale. So it must be the wholesale buyers of domestic produce who are making a killing, or oppressing farmers. In the past weeks when upland farmers had to sell their vegetables such as carrots and cabbage dirt-cheap, the market retail prices in Metro Manila didn’t go down commensurately. Retail vendors said their buying prices from the wholesalers remained high.

Maybe the wholesalers had to tack on the pass-through fees, or whatever term barangays and local government units have concocted to circumvent President Marcos’ prohibition on the collection of such fees. The prohibition might have even raised the rates, thus negating any price “crash” at the farm gate.

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Meanwhile, for imported agricultural products such as sugar and onions, the wholesalers say they peg their price based on what is set by the importers.

For sugar, the three lucky importers handpicked by Marcos 2.0 at the start of 2023 controlled prices: All Asian Countertrade Inc., Edison Lee Marketing Corp. and S&D Sucden Philippines.

Despite the three favored importers bringing in 440,000 metric tons of sugar (ahead of the issuance of the import order), later followed by a normal harvest and more importations, retail prices refused to come down from the stratosphere.

Today the lowest retail price for white refined sugar in the wet market is P80 a kilo; in the supermarkets, the price can be as high as P110. And to this day, the anomalous importation in the first quarter of 2023 has not been fully investigated.

Dozens of traders were reportedly slapped with charges of agricultural smuggling last year after prices of red onions surged to an eye-watering P700 a kilo (with no white onions to be had) during the 2022 Christmas holiday season.

I’m not sure though if those charged included the so-called onion queen, who has been implicated in onion smuggling during congressional investigations in the past years. She seems as untouchable as a well-connected player in the agriculture sector.

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For rice, a farmers’ group said this week that the average retail price of well-milled rice had gone down by P2, to P52 a kilo.

In my part of town yesterday, rice retail prices ranged from P50 to P56 for non-special varieties. Last week when I replenished my supply at my suki wholesaler, the local sinandomeng varieties that I bought for just P47 to P49 a kilo by the sack in the fourth quarter of 2023 had gone up to P54 to P56.

Rice, the country’s staple, is reportedly the only food item that has defied the easing inflation trend.

The Marcos administration has reported that it has secured rice imports from India and Vietnam, two of the world’s top exporters, to prevent a price spike as El Niño intensifies. Industry experts have said Filipinos aren’t big consumers of Indian rice. But if the imports can stabilize supply and prices, consumers will welcome the imports.

Farmers have stressed that the import volume must be balanced with domestic rice production. And there lies the rub: the government has yet to come up with accurate data on agricultural output.

Apart from importation, the P20-a-kilo rice administration is also considering giving cash transfer beneficiaries rice instead of money ostensibly to tame food inflation.

An official of the Department of Agriculture said President Marcos is considering this proposal, which the Department of Social Welfare and Development had opposed last December, pointing out that a cash grant is more practical than rice distribution.

It’s also doubtful that the beneficiaries of the Pantawid Pamilyang Pilipino Program or 4Ps would prefer rice to cash, which they withdraw from ATMs or banks. With the cash, they can pick the variety of rice to buy and use the rest of the money according to their needs. If it’s a rice handout, which will likely be distributed by politicians complete with photo ops, the beneficiaries could end up being shortchanged.

BBM, during his disastrous stint as concurrent agriculture secretary, had promised intervention in the supply chain to raise the earnings of farmers while at the same time bringing down retail prices.

The interventions were supposed to include cutting down the number of middlemen and providing cold storage facilities to preserve harvests and prevent prices from crashing.

Today there’s a new agriculture secretary. A seasoned businessman, perhaps he can translate into reality all the stuff that remain in the realm of aspiration.