Philippines exploring government-to-government fertilizer deal with China, Indonesia and UAE

0

As fertilizer prices soar, Agriculture Department President Ferdinand Marcos Jr. sees a government-to-government purchase as a way to bring cheaper fertilizer to farmers

MANILA, Philippines – Under a presidential directive to increase rice production and make the product more affordable for Filipinos, the Department of Agriculture (DA) is seeking an “urgent” purchase of fertilizer from another government – a move intended to give farmers access to cheaper fertilizer than is currently available.

Undersecretary-designate and spokeswoman for agriculture Kristine Evangelista told Rappler on Friday, July 22 that the department is considering three countries in particular as sources of fertilizer.

“We are looking at China, Indonesia and the United Arab Emirates (UAE),” she said.

“We’re looking at fertilizer prices from those countries, and we’re also doing a cost structure of fertilizers right now to see how much the landed cost will be, how much it will incur, the retail cost, the dealer price,” she continued.

China was among the top three global fertilizer exporters in 2021, along with Russia and Canada. Indonesia and the United Arab Emirates accounted for about 1% of global fertilizer exports that year.

In addition to prices, the DA takes into account the quality of fertilizers the country can supply and the logistical efficiency of transporting purchased fertilizers from the country of origin.

Asked how much time the department has to bring in the fertilizer, Evangelista said the government aims for the fertilizer to be used during the next rice planting season in October.

“It is very urgent because based on the inputs I have received from our rice group, if we are planning an October planting, then we need it immediately so that our farmers can put in the necessary fertilizers 45 days after planting,” the spokesperson said.

She could not yet say how much the administration plans to spend on the government-to-government purchase.

The idea of ​​buying fertilizer in bulk from another government came up during one of President Ferdinand Marcos Jr.’s three meetings with agriculture officials, Evangelista said.

By buying from another government, the administration would be able to cut out the middleman and strike a deal with a friendly country at an affordable price, according to the recommendation. In possession of cheap fertilizer, the government would then be able to sell fertilizer to Filipino farmers at a much more affordable price compared to what is available in the domestic market.

Why is this important?

The cost of fertilizers typically used by rice farmers has tripled, partly due to the Russian-Ukrainian war. Urea, the most commonly used grade of fertilizer, now costs P2,781.20 per 50 kilo bag, a 110% increase from 2021, according to the Fertilizer and Pesticide Authority. In some places, retail prices for urea reached 3,200 pula per bag.

When fertilizers become expensive, small-scale rice farmers tend to reduce the amount they put in their paddies, leading to lower rice production.

Former agriculture secretary William Dar said low fertilizer use led to a 6.8% drop in yield in the first half of the year.

A decline in rice production could lead to an increase in rice prices, which would be to the detriment of consumers. Expensive inputs like fertilizer are bad news for farmers’ incomes, especially in the face of cheaper rice from overseas flooding the market.

The Duterte administration has provided subsidies to farmers to meet rising input costs, but the Marcos administration is seeking to reduce reliance on subsidy-based programs.

Progressive groups such as the Kilusang Magbubukid ng Pilipinas are lobbying for a P15,000 subsidy for all farmers and fishermen. – Rappler.com

Share.

About Author

Comments are closed.