OUR agricultural sector faces a triple threat: two are man-made and the other is a natural phenomenon. For the former, I refer to the ongoing Middle East war that has resulted in the continuing escalation of fertilizer and fuel prices. The latter, meanwhile, involves the possibility of a severe El Niño in the second half of the year.
Fertilizer, primarily urea, is a critical input in ensuring plant growth. Palay (unhusked rice) needs a lot of nitrogen and urea contains around 40 percent. Nitrogen is needed to ensure that the rice grain fully develops and on average, four bags of urea are applied for every hectare.
Of course we have organic fertilizer but its nitrogen content is less than five percent. Massive amounts will thus be needed to approximate urea. Where to find this volume of cow and chicken manure and compost represents a formidable challenge.
Rising prices of fuel, meanwhile, affect agriculture in two ways. One is the increasing cost of running the farm machinery that has replaced carabaos. Two is the rise in the cost of transporting produce from farms to markets.
Under a normal situation, fertilizer and fuel constitute around 13 percent of palay production costs. With hefty price increases for both, these will lead to an upswing in production expenses and significant increases in rice retail prices.
International and local weather forecasters have also repeatedly warned that a very strong El Niño could hit the region during the second half of the year. The last time that we had a severe one was during 1997-1998. Palay production declined by 22 percent during that period.
Assuming a repeat this year and the effects lingering till next year, and with yearly palay output standing nearly 20 million metric tons (MT), a 20-percent drop in productivity means a loss of around four million MT. That translates to a rice loss of around 2.6 million MT (assuming an efficient palay to rice conversion at 65 percent).
Our annual rice consumption is nearly 16.5 million MT, but local rice production only reaches 13 million MT. If palay production declines by 20 percent due to a severe El Niño, we will have a supply gap of over five million MT. This is the amount of rice that the Philippines will have to import this year, according to the US Department of Agriculture.
Unlucky for us, we are not only facing an El Niño. As mentioned earlier, there are also the threats of rising fertilizer prices and an upswing in fuel prices. The palay production decline — seen in 1997-1998 — might be further aggravated.
Given these formidable challenges, what do we need to do?
For the fertilizer price increase, the government, in collaboration with the private sector (both local and international), needs to upscale the application of Bio-N fertilizer. It can substitute for urea because of its nitrogen fixing capability, but for this to happen, hundreds of extension workers have to be mobilized to teach farmers on the correct way of using Bio-N.
I was told that Bio-N is most effective in adequately irrigated farms but not in rainfed farms. Haphazard application will only lead to farmer frustration, most likely ending in the government being blamed.
For the fuel cost, the Department of Agriculture (DA) is already extending a cash subsidy for farmers. As to transporting goods to market, I cannot understand why local government units (LGUs) cannot afford to shoulder this given the limited harvests of our small farmers.
I am puzzled by news reports that the vegetable harvests of small tillers are rotting due to high transport costs and the DA being blamed for failing to provide transport assistance. It makes me wonder why LGUs are not responding when they are mandated to deliver basic services to their constituents. Besides, hiring trucks or jeepneys will not be a financial burden given the limited harvest volumes.
Addressing a severe El Niño will be more challenging. It will need the knowledge of weather forecasters regarding what areas will be most affected and how long the dry spells will last. Agricultural scientists can then plot out when to start planting, what crops need to be planted where and calculate the likely losses that should inform the volume of imports needed to prevent severe supply shortfalls.
Once the plan is formulated, it will become the basis of mobilizing LGU assistance for local communities. The LGUs are in the best position to quickly respond to the needs of their constituents besides having funds that can complement national government resources.
Resorting to importation is inevitable to build stockpiles for key commodities such as rice or sugar. Importation, however, should be done at the least cost to the government given the serious fiscal problem it is facing. It must also be implemented in a way that will prevent rent-seeking activities.
This can be achieved by the president appealing to the patriotic sense of selected conglomerates. He should encourage these conglomerates to import, stockpile and then release at agreed prices to stabilize the market.
Singapore has done this rice buffer stocking arrangement with private rice traders. I cannot see why it cannot be done here given that our conglomerates have the financial clout, warehouses and logistics.
Finally, public consultations will have to be made to present the courses of action that the government will take to respond to the crisis situation. The government is too small an entity and it needs the help of the private business sector, civil society and people’s organizations, academe and the media.
There are more than enough Filipinos of goodwill who can help in the task if the government actively seeks their participation.
fdadriano88@gmail.com
