UNCERTAINTY in the prices of poultry products may weaken the poultry industry in the Philippines.
This was stressed by Dr. Raquel M. Balanay during her discussion of the “Price Volatility and Supply Response of Poultry in the Philippines,” recently at the Agriculture and Development Seminar Series of the Southeast Asian Regional Center for Graduate Study and Research in Agriculture (Searca) based in Los Baños, Laguna.
Dr. Balanay is an assistant professor at the College of Agricultural Sciences and Natural Resources, Caraga University in Butuan City and a Searca scholar who earned her PhD in agricultural economics at the University of the Philippines Los Baños (UPLB).
Philippine government-hosted Searca is one of 20 regional “centers of excellence” of the Southeast Asian Ministers of Education Organization, an intergovernment body founded in 1965 to foster cooperation in education, science, and culture among Southeast Asian nations.
Headed by Dr. Gil C. Saguiguit Jr., Searca is mandated to address the agricultural and rural development needs of Southeast Asia through capacity-building interventions such as scholarships and other academic grants. So far, Searca has provided a total of 356 MS and PhD scholarships and 24 PhD research scholarships to Filipinos.
The study conducted and presen- ted by Dr. Balanay was awarded Best PhD Thesis in Agricultural Economics by the UPLB College of Economics and Management in school year 2010-11.
Price volatility is an estimate of the range within which prices can vary in the future. Dr. Balanay’s study showed that since poultry prices in the country are volatile, poultry producers tend to avoid risks in making production decisions.
This could lead to opportunity losses. Price volatility in poultry may also affect other markets because of its size and influence.
Dr. Balanay explained that chicken producers are risk-averse and not risk takers because of the short-term changes in the price of poultry products. Price changes affect the behavior of poultry producers towards the use of expectations in planning and decision making.
To counter the effects of and lessen price volatility in poultry, Dr. Balanay recommends the improvement of market coordination and hedging options, the establishment of a monitoring system for price volatility as well as upgrading the government’s information network capability. She said the government should also provide support for easy access to interconnected information systems.
For stakeholders who do not have access to online databases, extension services for transmission of relevant market information should be improved.
Moreover, Dr. Balanay said statistical agencies should improve data collection and the organization of online databases. Further research on price volatility and supply response in poultry and other commodities, as well as on the improvement of poultry breeds, should also be conducted.
Dr. Balanay’s study focused on poultry production because of its importance to Philippine agriculture. According to the Philippine Country Report of the United States Department of Agriculture—Foreign Agriculture Service, poultry production in the Philippines accounts for 14 percent of the entire agricultural production in the country.
