The current global situation smacks of catastrophic scenarios for ill-prepared and financially weak countries. World economists say there is a 44% chance of a global recession in the next twelve months. It was also Bank of America’s reading of a US recession and the International Monetary Fund’s statement that this year would be tough and tougher would be 2023 with the recession.
Today, volatile oil prices have temporarily eased, but their effect on global food prices remains. The global inflation rate is 7%, while the US and England have high inflation of 9.1% over 40 years and are expected to rise. The Eurozone, an economic group of 19 European countries, has a record inflation average of 8.6% and almost half of its members have reached double-digit inflation. The Philippine Statistics Authority (PSA) reports that our inflation averaged 4.4% in the first half, topping BSP’s 2-4% after accelerating to 6.1% from 5.4% in may.
Renowned economist and governor of Bangko Sentral ng Pilipinas, Felipe Medalla, says that inflation is 80% imported, and without the rising prices of our imported goods, our inflation would have been only 1.22%.
DTI’s new secretary, Fred Pascual, told the Management Association of the Philippines, “there is not much we can do with rising oil prices.”
Of course, we can’t do anything about oil, but we must produce enough food for our citizens even if our food shortage reaches about 25% of demand. President BBM admitted that there is now a shortage of rice, corn, pork, poultry, fish and fertilizers and that these shortages could last up to three years.
Technically, there is enough food for everyone if the government prioritizes the supply value chain from farmer to consumer. The Ministry of Agriculture should lead the modernization of the farmer from pre-harvest, post-harvest, storage, packaging and transportation. Let’s put an end to these poor handling, poor distribution, lack of food preservation, and storage that rot our food.
In a UP study, rice wastage was estimated at 296,869 metric tons in 2008, or 12.2% of that year’s rice imports or P7.2B. Imagine the losses for banana, papaya, onions, eggplant, mango, cabbage including fish and poultry.
To deflate food prices in the supply chain, the government should shorten the time between production and consumption, by ensuring good roads, efficient logistics management and appropriate transport vehicles. This territory is currently dominated by urban market wholesalers, traders and processors who, in turn, dictate daily food prices to retailers.
I remember the Greater Manila Terminal Food Market (GMTFM) which became the Food Terminal Market (FTI) in West Bicutan, Taguig, an agro-industrial complex which became a center for food processing and consolidation with services of warehousing, research and quality control, marketing trade services.
The 120-hectare FTI went to retail and distribution centers, particularly the Kadiwa store system, which provided financial grants and built the capacity of farmers and fisherfolk to become reliable suppliers of food products for consumers and other NGOs. In short, middleman supply chain challenges have been eradicated, if not minimized.
But after EDSA 86, FTI was included in Pres. Privatization program from Cory Aquino 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 Secretary of Agriculture Manny Piñol, on FTI’s five-year roadmap, planned to build a new food terminal in Taguig that will have reception and processing facilities for agricultural and fishing products for associations of consumers and sellers in Metro Manila.
A total of six cold stores or regional food terminals will be set up in Luzon Visayas and Mindanao and all foods and their price movements will be interconnected, such as the daily purchase prices of chicken and pork.
Of course, it is the ideal solution to finally connect the farmer to the consumer. We all know that in the hinterland, families of powerful politicians control business and commerce from their side. They would all discuss “free trade” and less government intervention. But remember, this is a food safety issue. If we allow high food prices, people will turn violent and governments will fall.
This is the moment of great global peril, and everything points to “food self-sufficiency”. We are a blessed archipelago with a talented population of 110 million. We have about 4.8 million farms waiting to be fully exploited. This Is How We’ll Survive This Coming “Perfect Economic Storm”
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