On Rising Pork and Chicken Prices and the Need to Strengthen Filipino Agribusinesses

The strengthening of Filipino agribusinesses should be accompanied by intensified research and development activities, lowering of production costs and wastage, enhanced access to markets, technology and capital, and infrastructure building.

The year 2021 started still with the COVID-19 pandemic dominating the headlines, but an offshoot of it slowly began to take over the front seat as the month of January progressed.

Towards the latter part of January, concerns about short supply and rising prices of pork began to rise in Metro Manila. Consumers started to notice the near daily increase in the retail prices of lienpo, kasim and other pork parts both at wet markets and supermarkets. As of this writing, the price per kilo now range to between P300 to more than P450.

The prices of chicken also began to increase as consumers started to shift preferences from pork. At some wet markets and supermarkets in Metro Manila, the price per kilo of chicken is already between P180 to more than P200. 

Authorities attribute the increase in prices and decrease in the supply of pork to the effects of African Swine Fever (ASF), which has been ravaging many hog farms in the Philippines, especially in Luzon, since 2019. ASF was able to enter the country through illegally traded pork meat being brought in from overseas or sold from one locality to another. So far, millions of pigs died and had to be culled in hog farms across the islands to control the spread of ASF. Other factors, such as artificial manipulation of supply and prices of pork by some traders and middlemen in order to take advantage of the situation, are also being considered, although this is being vehemently denied by pork industry groups.

On the other hand, the rise in prices of chicken is primarily the effect of a combination of sudden shift in consumer preferences, higher cost of broiler (chicken meat) production and some broiler producers opting to temporarily stop production after losing their main markets due to COVID-19 pandemic. Industry groups claim that the prices of broiler chicks and feeds have become more expensive, especially during the onset of the COVID-19 pandemic, which made it more difficult to transport goods from one part of the country to another. The pandemic also caused some broiler farms to temporarily stop production, as the decrease in orders from fast food chains, which are badly affected by crowd control measures, and health and safety protocols being implemented by the government to control COVID-19, and higher production costs made it unprofitable for them to continue the business for the time being. The rising pork prices made some consumers shift to buying chicken, which is now causing pressure on the supply in retail markets.

Acting on the advise of key government officials, President Rodrigo Duterte issued an executive order that imposed a price ceiling on pork and chicken effective February 8, 2021. The move and the plan to lower tariffs on imported pork and chicken meat were heavily criticized by wet market vendors, supermarkets and industry groups, all of whom are claiming that they may be forced to declare a "pork and chicken holiday" instead of continuing to produce and sell pork and chicken at a loss to comply with the executive order. Instead, they blame the Department of Agriculture (DA) for the current mess, saying that its officials and employees are "incompetent" and "are trying to resort to press releases and importation instead of dealing with the situation through lasting solutions that will protect the local industries."

Supply side interventions such as the setting of price ceiling or floor price on commodities and the lowering of tariffs on imports are and should be short-term solutions, aimed at addressing supply gaps and increasing prices. As we have seen with rice tariffication, the lowering of tariffs resulted to an increase in the supply of imported rice in the market, which eventually led to the lowering of wholesale and retail prices of rice, and the country's inflation rate. Supply side interventions may benefit consumers only in the short run, which is why the government should only implement such option on a temporary basis.

The long-term solution should be the strengthening of Filipino agribusinesses, especially producers/farmers, to ensure food sufficiency and stable prices, and increase farm incomes. The COVID-19 pandemic has shown to us the vulnerabilities of depending on imported essential items and commodities, especially food supplies, with the decision of Vietnam, the Philippines' leading supplier of imported rice, to stop selling its rice stocks to overseas markets as its act of "self preservation" being the prime example. Food sufficiency, security and availability are key elements of national security and national survival, and the strengthening of Filipino agribusinesses and farming communities should be given prime consideration by the government.

The strengthening of Filipino agribusinesses should be accompanied by intensified research and development activities, lowering of production costs and wastage, enhanced access to markets, technology and capital, and infrastructure building. This can only be done if DA and the rest of the government will have a consistent and continuous program, something that, unfortunately, has not been done in the post-Ferdinand Marcos era. With rising food prices, concerns about the security of food supplies and the vulnerabilities of food importation to external shocks such as the economic effects of COVID-19 pandemic, it is high time to focus on strengthening agribusinesses and farming communities like as if it is a matter of life and death for the Philippines and the Filipino people.

About the Author
Benedict is an agricultural economist, academician and writer. He has gained experience and expertise in various fields of economics, business, political science and public relations after through professional ventures in the academe, and in the public and private sectors. He has authored or co-authored key publications on topics ranging from agriculture and food security to global affairs and politics.
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