Consumption over production

by Jose Ma. Montelibano

“Hillcrest Farmers Market” | Photo by Rob.Bertholf via Flickr/CC BY 2.0

I cannot help it; I just get drawn into intermittent historical quicksand when recurring issues pop up and everyone thinks of them as new. Well, yes, they are new, yet at least as old as my five decades of adult life.

If you have been reading up on the problem of pork supply in Metro Manila and possibly the rest of Luzon, their naturally rising prices due to inadequate supply, plus government moves to address the shortage with imports, then you know what I mean. It is pork now, but it might as well be chicken, or, God forbid, rice itself. Because if we step back a little and dig deeper into our memory (or Google it), it is an old problem with a new expression.

Every time there is a situation like this, a shortage, an oversupply, an epidemic affecting hogs or chickens, rising prices, and government price ceilings, there is a definite pattern favoring consumers. This goes to show that agriculture is fundamentally more political than what you think it – food production. Everyone consumes, which means more votes. Compared to consumers, producers are a minority, which means consumers will be favored over producers.

Problems that plague agriculture enough to make front-page news have a bearing on production and technology but more directly on price levels that consumers have difficulty paying. Or else, it will not make it to national news. A case in point is the African Swine Flu (ASF). That virus has been affecting hog raisers in Luzon for almost two years. Because that is really a technical and agricultural problem, the interest is not as high. After two years, though, the impact of the ASF and the culling of infected hogs finally reaches the point of critical supply in Metro Manila and Luzon.

For fear of the consumers, the government is taking several initiatives. First, it imposes price ceilings, knowing that those who sell will not sell at a loss. This is a political band-aid. It will cause the shortage to worsen as the limited supply will not be willingly sold without a profit. The government will then have to look for additional supply at prices that can meet the imposed price ceilings. Mindanao suppliers are trying to cooperate, but the reasons are already political as well. They would rather sell to Metro Manila at higher prices, but they will go out of their way to please their fellow Mindanaoan, President Duterte.

However, Mindanao does not have enough to satisfy the demand of Metro Manila and Luzon, forcing the government to import. Whenever the government imports a traditionally produced commodity domestically, it breeds new problems – and it already has. If import prices are low, local producers will feel pressured and threatened. In a society that favors the consumers over producers, low import prices tend to extend importations beyond the moment’s needs. Local producers cannot possibly compete with the lowest prices in a global market. Globally, there is always a source or sources who can sell pork lower for a variety of reasons.

“Tariffs are economical and political in nature. And because consumers are the favored lot if the government has a choice, lower tariffs will be used so prices will stay within imposed price ceilings. Hog raisers will then be the ultimate victims, like most other producers of anything.”

Then, tariffs come into play. Tariffs are economical and political in nature. And because consumers are the favored lot if the government has a choice, lower tariffs will be used so prices will stay within imposed price ceilings. Hog raisers will then be the ultimate victims, like most other producers of anything. Producers must be sustained with profits or subsidies, but producers do not have a sympathetic reception in the Philippines when push comes to shove.

Is it complicated? Yes, it is. In any national setting where production is weak and invariably sacrificed for consumers’ interests, it will always be complicated. What aggravates the complication is that Filipinos are great at consuming but do not realize how they also ought to be as great or greater at producing. Whenever we see anything of interest, we ask “How much?” instead of “How is it produced?”

There lies our problem. We have always been consumers and not producers. It is not a matter of laziness but deeply influenced by the natural wealth of our motherland. When what we need is abundantly provided by nature, there is less needed to produce. Something natural has become cultural, and the result is the habit of consumption and the inadequacy of production.

By its very nature and mandate, the Department of Agriculture (DA) is poised to be the lead agency in promoting and instilling the culture of production, at least as far as food is concerned. That is crucial, too, because farmers and fisherfolk are natural producers of food. They should be the focal point in any production program, not only for the food they produce but to exemplify the need and benefits of being producers. Unfortunately, that has not been the case. Consumers are the ones protected, not producers. We have chosen to be dependent on the outside by sacrificing the development of our own human producers.

“Solutions to major agricultural problems need to satiate the consumers and become political in nature. Consequently, the efficacy of the DA is subtly undermined, year after year, administration after administration.”

Solutions to major agricultural problems need to satiate the consumers and become political in nature. Consequently, the efficacy of the DA is subtly undermined, year after year, administration after administration. That being so, professional executives with academic backgrounds and field experience will have to convert themselves to be politicians ultimately. If they try to, and they will survive, there will never be visionary leadership in agriculture. There will never be enough time as politics is a revolving door, not a super cross-country highway.

Small farmers and fisherfolk will have to look beyond farming and fishing to raise their families out of their historical poverty. They have been doing so, by the way, and slowly succeeding. But let me take that up in another article. Meanwhile, I can only hope that professionals and technocrats can exercise their abilities in the most strategic agriculture areas, especially enabling and rewarding producers. Yet, they can do that only when politicians support rather than dictate to them.

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