By Atty. Gilberto Lauengco, J.D.

“As long as greed is stronger than compassion, there will always be suffering.” - Rusty Eric

There is an ongoing debate about imports and the effects of the same on farmers. There are several sectors who argue that imports hurt farmers and that there should be greater trade restrictions on importation of agricultural products. There are some, however, that argue that trade protection is not the key. They argue that increasing support for the farmers is more effective than restricting import and trade. In addition, many say that the true culprit for high prices of vegetables like onions are actually the unscrupulous traders and hoarders and not importation per se.

Even when retail prices of onions or other agricultural products were high, the farmgate prices were still low. As such, the farmers did not actually benefit from the high retail prices. Farmers are forced to sell low because they have little alternatives in some areas. They have limited access to retail buyers and they have limited access to storage facilities. Most private cold storage facilities were monopolized by traders who reserved cold storage facilities very early thereby locking out farmers and farmer cooperatives.

One of the keys, therefore, to managing the prices and helping the farmers and fisherfolk is post- harvest logistical support in terms of cold storage facilities.

Last week, a bill was filed in congress that “seeks to establish a cold storage facility in every province for agricultural products and offer incentives for setting up such facilities to store farmers’ produce in and keep them fresh. The incentives shall be given to private entities and local governments that will establish such facilities and may be in the form of tax exemptions, subsidies and other forms of financial support. Last month, the Department of Agriculture committed to build six cold storage facilities in four onion producing regions. The department of Agriculture and other related agencies have increased their budget items for the setting up of cold storage facilities.

Government alone cannot, however, fill the large need for cold storage facilities. Private enterprises, through social enterprises in joint venture agreements with cooperatives and farmer associations of local government units, must be encouraged with either subsidies, land use and other non-financial support such as tax breaks, customs duties breaks for importing cold storage facilities from other countries.

Social enterprises like Public Private Partnerships must be also encouraged with these incentives. In exchange, these social enterprises must ensure that logistics cost for farmers remain low or even subsidized in exchange for post purchase payments. The age of profit hungry traders must now end and the era of social enterprises must begin.

The development and support for alternative or renewable energy powered cold chain technology must also be encouraged and supported to further driver the costs down.

Other than strengthening support to farmers through cold chain technology, there must be an increased effort to make life painful for traders who try to manipulate prices at the selling end while depressing the purchase price from farmers.

Last Feb. 6, House Speaker Ferdinand Martin Romualdez met with officials from the Department of Agriculture and the Department of Trade and Industry and called for “an all-out war against hoarders and unscrupulous hoarders of agricultural products.” Combined with support, government intervention in prices can make it unprofitable for hoarders.
Other than these agencies, the Bureau of Internal Revenue must be given free rein to run after the traders who have earned so much from the pain of the farmers. In short, Government must make life painful for greedy traders.

This is my oblique observation.

Editor’s note: The opinions expressed in the foregoing article are solely the author’s and do not reflect the opinions and beliefs of the Philippine News Agency (PNA) or any other office under the Presidential Communications Office.

About the Columnist

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ATTY. GILBERTO LAUENGCO, J.D. is a lawyer, educator, political strategist, government consultant, Lego enthusiast, and the director of CAER Think Tank. He is a Former Vice Chairman of MECO, Special Assistant of NFA and City Administrator among others. His broad experience has molded his unique approach to issues analysis which he calls the oblique observation.