The Department of Trade and Industry (DTI) recently launched the Program for Farmer Retail Market (FRM), a contract farming program that seeks to establish a direct link between onion farmers and institutional buyers.
The DTI said this program will enable a steady supply of local onions, especially during lean months.
The plan will eventually be expanded to other crops like rice.
“This plan started in January but it’s a continuing project. If we succeed with onions and rice we’ll venture into other agriculture products. Ultimately our objective is to lower retail cost while providing a fair and reasonable profit for farmers. But rice is still just a target.
We just started with onions,” said DTI undersecretary Ruth Castelo.
The DTI launched FRM as part of the initiatives to address the rising onion prices, among others.
The DTI in a meeting last April, obtained the support of big retailers like SM Supermarkets, Robinsons and Puregold to join the program.
The DTI is also looking to have the same partnership with the Hotel and Restaurants Association of the Philippines .
It has also invited ALLDAY supermarkets for a meeting to discuss FRM and their possible participation in the program.
Monde Nissin Corp. and Unilever Philippines Inc. conveyed their interest in participating in the program by sourcing shallots directly from the farmers for their seasoning products.
The pilot FRM agreement was executed last month between Puregold Supermarket and Ungab Farmers Association of Barangay Ungab, Cuyapo, Nueva Ecija.
Once established, the DTI will apply the same strategy to other agricultural products such as rice, garlic, corn, and sugar.
To address concerns on financing, the DTI’s financing arm, the Small Business Corp. will introduce the Diminishing Loan Assistance (DLA) to the farmers.
The DLA is a loan program that utilizes a diminishing loan method, or a method of calculating the interest due on a loan, where the interest is calculated on the decreasing outstanding principal balance.
The program comes after the price of onion surged to P700 per kilogram last December due to acute shortage.
Citing data from the Philippine Statistics Authority, DTI said red onion prices in the National Capital Region (NCR) have been declining since January. The same pattern was seen in other regions.
Based on the Department of Agriculture’s (DA) monitoring of public markets in NCR, prevailing retail price as of yesterday ranges from P140 to P190 per kg for local red onion and from P140 to P180 per kg for local white onion.
The program was discussed by the National Price Coordinating Council in its meeting last May 31 as part of the measured undertaken by the inter-agency body in stabilizing prices and supply of basic and prime commodities BNPCs such as manufactured goods, agricultural products, medicines, fuels, LPG, among others.
