The present global situation reeks of doomsday scenarios for ill-prepared and financially weak countries. World economists say there is a 44 percent chance of a global recession in the next twelve months. This was also the reading of Bank of America on a US recession and the International Monetary Fund statement that this year would be tough and tougher would be 2023 with recession.
Today, the unstable prices of oil temporarily subsided but its effect on food prices world wide remains. Global inflation rate is at 7 percent while both US and England have a 40 year high inflation of 9.1 percent and expected to increase. Eurozone , an economic group of 19 European countries, has an all time high inflation average of 8.6 percent and nearly half its members reached double digit inflation. The Philippine Statistics authority (PSA) says our inflation averaged 4.4 percent in the first half, exceeding BSP’s two to four percent after quickening to 6.1 percent from 5.4 percent in May.
Noted economist and Bangko Sentral ng Pilipinas governor Felipe Medalla says inflation is 80 percent imported, and were it not for the rise in the prices of our imported goods, our inflation would have been just 1.22 percent.
Newly appointed DTI secretary Fred Pascual told the Management Association of the Philippines, “there isn’t much we can do with the rising prices of oil”.
Of course, we cannot do anything about the oil but we must produce enough food for our citizens even as our shortage in food runs to about 25 percent of demand. President BBM admitted that there is shortage now of rice, corn, pork, poultry, fish and of fertilizers and these shortages could last for as long as three years.
Technically, there is enough food for everybody if government prioritizes the supply value chain, from the farmer to the consumer. The Department of Agriculture should lead in modernizing the farmer from pre-harvest, post-harvest, storage, packaging and transport . Let us end these poor handling, poor distribution, absence of food preservation, and storage that are rotting our food.
In a UP study, rice wastage was estimated at 296,869 metric tons in 2008 which is 12.2 percent of that year’s rice imports or P7.2 B . Imagine the losses for banana, papaya, onions, eggplants, mango , cabbage including fish and poultry.
To deflate food prices in the supply chain, government should shorten the time span between production and consumption, guaranteeing good roads, efficient logistical management and proper transportation vehicles. This turf is presently lorded by wholesalers, traders and processors from the urban market who in turn dictate to retailers the day to day food prices.
I remember the Greater Manila Terminal Food Market (GMTFM) which became the Food Terminal Market (FTI) in West Bicutan, Taguig, an agro-industrial complex that became a food processing and food consolidation center with provides warehousing, research and quality control, marketing trading services.
The 120-hectare FTI went into retail and distribution centers, specifically the Kadiwa store system, that gave financial grants and enhanced the capacities of farmers and fisherfolk to become reliable food commodity suppliers to consumers and other NGO’s. In short, the supply chain challenges by middlemen was eradicated if not minimized.
But after EDSA 86, FTI was included in Pres. Cory Aquino’s privatization program and sold to Ayala Land in 2012 at a price of P24.3B for a total of 74 hectares. Today, FTI still has 36 hectares available while 11 hectares are occupied by informal settlers.
Former Agriculture secretary Manny Piñol on FTI’s five year road map, planned to build a new food terminal in Taguig that will have receiving and processing facilities for farm and fisheries produce for consumers and vendors associations in Metro Manila.
A total of six cold storage facilities or regional food terminals will be set up in in Luzon Visayas and Mindanao and all food and their price movements will inter-connected, such as daily buying prices of chicken and hogs.
Of course, this is the ideal solution to finally link the farmer with the consumer. We are all aware that in the hinterlands, families of powerful politicians control business and trading on their side. They would all argue about “free trade” and less government intervention. But remember, this is an issue of food security. If we allow high food prices, people will become violent and governments will fall.
This is the time of great global peril, and everything points to “self food sufficiency”. We are a blessed archipelago with a talented 110 million population. We have an estimated 4.8 million agricultural farms waiting to be harnessed fully. This is the way we will survive this coming “perfect economic storm”