Legislative challenges on agricultural product pricing

Our farmers and agricultural stakeholders can seek assistance and advice of experts and lawyers on the efficient utilization of their land.

Published in Daily Tribune on November 6, 2020
by: Glorydee Comparativo

The irrational pricing of agricultural produce, which has long been a challenge to our policy-makers, has worsened with the impact of the COVID-19 pandemic. Despite the demand, prices of the country’s main agricultural crops such as rice, corn, coconut, sugarcane, banana, coffee and abaca remain unreasonably low. The government continues to receive hundreds of protests from our local small farmers about the financial straits they endure. Many of them are considering abandoning farming, creating serious threats to our food security and uncertainty in the livelihood of our farmers.

Congress already enacted several laws designed to accelerate the growth and development of agriculture in general and provide incentives and protection to our farmers. Republic Act (RA) 7900, or the “High-Value Crops Development Act of 1995”; RA 7308, or the “Seed Industry Development Act of 1992”; RA 9168, or the “Philippine Plant Variety Protection Act of 2002”; and RA 7607 or the “Magna Carta of Small Farmers,” among others, give highest priority to the development of agriculture and provide financial assistance and tax incentives to farmers.

These notwithstanding, farmers are continually forced to sell at unreasonably low prices even as consumers complain about the exorbitant cost of putting these same products on the table. Farm gate prices as of the first week of October 2020 were P15.79/kilogram for unhusked rice and P11.89 for yellow corn grain per Price Release Updates of Philippine Statistics Authority and, as of 15 October 2020, an average of P21.86 for copra per Philippine Coconut Authority (PCA).

The forgoing indicates that current laws fail to effect a rationalization of prices of agricultural products. This may be because laws enacted by Congress focus on the development of pre-harvest activities, such as training, access to planting materials/equipment and innovations to increase production. While these help increase production, the resulting improvement in crop yield versus demand forces farm gate prices to decrease. Perhaps it is time for Congress to revisit the above-mentioned laws with emphasis on how to empower farmers to sell their products at closer to market price.

Meanwhile, measures such as those pursuant to Sections 25 and 27 of RA 7607, which provide for price support and procurement of agricultural produce respectively, should be properly implemented. Intervention buying for all domestic products should be enforced by the government, especially amid the disruption in transporting crops to markets and consumers due to the current pandemic and calamities. The government’s implementing agencies, such as the National Food Authority (NFA), PCA, etc., should implement a minimum guaranteed price program or price support system designed to protect our farmers against sharp market price drops. These may include direct government purchases of products where Local Government Units, the Department of Agriculture or NFA shall directly buy agricultural products from our farmers at closer to market prices. Export subsidies and higher tariffs and levies on imported agricultural products should now be strictly effected. Lastly, Congress should review the effects of RA 8178 or the Agricultural Tariffication Act to our farmers’ livelihood and amend accordingly because maintaining stable and closer to market prices of agricultural products will translate into a more decent livelihood and provide greater protection to our farmers and secure the sustainability of our food industry.

To overcome the price volatility of agricultural products in the meantime, our farmers and agricultural stakeholders can seek assistance and advice of experts and lawyers on the efficient utilization of their land and increase production by exploring the benefits that existing laws afford them. These laws could minimize investment and production losses as they provide much needed protection, incentive and tax exemptions to our farmers in their day to day operations.