DA slammed for 215% gap in farmgate, retail costs

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LAWMAKERS yesterday blamed the Department of Agriculture (DA) for allegedly sitting on the perennial problem of high retail prices of rice and other basic goods at a time when farm gate prices are relatively low, saying some people are making a profit from the “widening gap” between farmgate and retail prices.

Congressmen took the DA’s Agribusiness and Marketing Assistance Service (AMAS) to task for failing to protect the public from the high prices of basic goods, noting that the discrepancy between farmgate and retail prices has reached as much as 215 percent.

Surigao del Sur Rep. Romeo Momo Sr. said the presentation made by AMAS director Junibert de Sagun clearly showed that prices at the farm gate, or the product’s cost from farmers and producers, are “too low” compared to the retail prices in the market.

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“We know the supply chain but I don’t think that is how huge the prices of the commodities should be at the retail,” Momo told the panel after pointing out that the gap between the prices has reached between 213 to 215 percent.

The Speaker earlier ordered the motu proprio investigation after he and Rep. Erwin Tulfo (PL, ACT-CIS) met last Tuesday with representatives of producers, retailers, and grocery stores who all denied making substantial adjustments on the prices of basic commodities.

Yesterday, Romualdez reaffirmed his commitment to fight hoarding, profiteering and smuggling of agricultural products, making it a top priority of the House of Representatives in the remaining session days of the 19th Congress.

“Tuloy ang laban natin kontra sa mga (our fight continues against) hoarders, profiteers, at (and) smugglers ng mga (of) agricultural products,” the Speaker said in his speech during the resumption of the session. “The discrepancy between farmgate and retail prices of basic goods is alarming and warrants immediate attention.”

For example, based on De Sagun’s presentation, the farm fare price of ampalaya (bitter gourd) is only P52 per kilogram, but it is being sold for P120 per kilogram retail, while sitaw (string beans) only costs P45.50 per kilogram at farm gate but is sold at P100 per kilogram.

While he said that his office is still determining the build-up cost from the farm gate to retail, De Sagun also admitted that his office no longer verifies the prices whenever suppliers claim they sourced their products from huge markets like Balintawak in Quezon City and Divisoria in Manila since it is difficult to conduct person-to-person interviews there.

“You have the authority to investigate,” Tulfo (PL, ACT) told De Sagun. “It is not the power – well, we have the power, what we call an investigating power of Congress. But it is under your responsibility to check these prices, actually.”

Steven Cua, president of the Philippine Amalgamated Supermarkets Association, said the average margins of supermarket operators is around eight to 10 percent, which prompted Iloilo Rep. Ferjenel Biron and Momo to say that some people “in the middle” are making a killing out of it since the gap between farm gate and retail prices remain wide given the profit margins of grocery stores.

“Somebody is earning in the middle,” said Biron, who also lectured the National Economic and Development Authority (NEDA) on the problems caused by its “free trade-centric” mindset.

Biron said that while the NEDA would always insist on free trade, it’s high time that the government protect local farmers and producers because it will eventually be difficult to import agricultural products “with what is happening in the world, with the conflict in Europe, in the Middle East.”

“Food security should involve domestic investment,” he said. “These countries will now secure their own supply. So dapat ibahin na natin (So we should change it).”

RICE TARIFFS

In a separate hearing of the House Committee on Agriculture, Tulfo insisted that the Rice Tariffication law should be amended to again allow NFA to sell rice at very cheap prices to the public.

“Right now, ang bigas natin parang ginto ang presyo (the price of rice is like gold). Unlike before, when NFA [was] selling rice sa palengke affordable binibili ng mga tao (in the markets what the people were buying was affordable),” Tulfo said.

Republic Act (RA) No. 11203 or the RTL prohibits the NFA from selling rice to the public to stabilize the rice industry although the agency is allowed to sell directly to local government units (LGUs), which, in turn, can sell cheap rice to the public.

NEDA Director Nieva Natural said the law also stopped the NFA from selling rice because of governance issues which left the government in debt and because of this, the agency had no choice to focus on the purchase of buffer stocks.

“Ang trabaho na lang ng NFA ngayon maging inutil (the only job of the NFA now is to be useless),” Tulfo said, noting that NFA rice used to be cheaper by P10 to P15 per kilo.

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