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WITH the
continuous increase in the price of oil and higher
export taxes imposed by fertilizer-exporting countries
like China, the Philippines does not see any respite
from high fertilizer prices in the near future.
The
bleak outlook comes from the Fertilizer and Pesticides
Authority (FPA) under the Department of Agriculture
(DA).
“If you
will note, the increases in the price of fertilizer
tracked the spikes in the price of oil in the domestic
market,” said FPA executive director Norlito Gicana in a
telephone interview.
Figures
from FPA’s web site reveal that in the early part of
2008, the prices of six fertilizer grades have been
climbing almost every week.
The six
major types of fertilizer used in the Philippines are
urea (a byproduct of oil), ammophos, diammonium
phosphate (DAP), muriate of potash, ammonium sulfate and
Triple 14.
For the
week of June 3 to 6, FPA noted that the price of a
50-kilogram (kg) bag of urea in 13 regions averaged
P1,769.28. During the May 26 to 29 period, urea was
pegged at P1,666.1 per 50-kg bag. The price of Triple 14
for the week of June 3 to 6 was P973.26 per 50-kg bag,
or more than P60 higher than the price registered during
the May 26 to 29 period.
While
other fertilizer grades are not petroleum-based, Gicana
said production and distribution costs went up due to
the unabated increase in the price of oil.
Besides
oil prices, Gicana said higher export taxes imposed by
fertilizer-exporting countries like China also compound
the problem for the Philippines. He said China now
imposes a 135-percent export duty on all grades of
fertilizer shipped out to other countries.
The
other major sources of imported fertilizer for the
Philippines are the Middle East, Canada, Morocco and the
United States.
Based on
FPA figures, the Philippines imported more than 1
million metric tons (MMT) of various fertilizers in
2006.
To
insulate farmers from future price increases, Gicana
said the government is now encouraging the use of
organic fertilizers which are cheaper than the inorganic
variant.
Earlier,
rice farmers belonging to the National Rice Farmers
Council (NRFC) raised concerns that the unabated spike
in the price of fertilizer could pose a threat to the
so-called rice self-sufficiency target of the Philippine
government by 2010.
Dr.
Frisco Malabanan, director of the Ginintuang Masaganang
Ani (GMA) rice program under the DA, allayed these fears
and said the government is set to extend a subsidy of
P250 per 50-kg bag of urea to farmers. The assistance is
limited to 2 bags of urea per hectare.
“The DA
will be giving this assistance to all rice areas. More
subsidy may be extended to farmers once the local
government units [LGUs] monetize their unremitted
internal revenue allotment [IRA],” he said.
Under
the DA’s and LGUs’ plan, part of the unremitted IRA
estimated at P12.5 billion, could be used to extend a
fertilizer subsidy amounting to as much P1,500 a hectare
of rice land. “The subsidy that will be extended by LGUs
will depend on the size of their unremitted IRA.”
Earlier
also, Sen. Mar Roxas said the country’s overreliance on
imported rice can be immediately reduced in the
short-term by providing fertilizers to Filipino farmers.
“We are
importing 2 million metric tons of rice this year. If we
provide our farmers with the right amount of fertilizer
in irrigated lands, we can raise our present production
by about 1.2 million MT a year,” he said.
The
chairman of the Senate Committee on Trade said with the
increased cost of fertilizer, which rose (at the time of
Roxas’s remarks) to P1,200 from just P600 last year,
farmers have reduced their fertilizer usage to 3 bags
per hectare or just half the ideal amount of 6 bags.
“We have
1 million hectares of productive irrigated land. What
the government can do is provide additional 3 bags of
fertilizer per hectare worth around P5,000 to raise
yield by 1.2 MT a hectare,” he explained.
Roxas
said that investing in fertilizers for farmers would
yield more rice for the country and earnings for the
farmers, thus cutting public expenditures on imported
rice that benefit only the farmers of Thailand, Vietnam
and the United States.
“During
the food summit last March, the President committed to
P15 billion worth of agricultural credit to farmers.
Even just P5 billion of this will cover the additional
fertilizer needed by farmers to increase their rice
yields,” he said.
Roxas
lamented that the fertilizer scam in 2004 tainted the
government’s assistance program for farmers. |
