As onion prices soar, gov’t urged to invest on cold storage facilities

“It would lessen our cost surplus. We would also be able to guarantee the benefits of these cold storage facilities that it would bring to our farmers, especially here in Nueva Ecija who plant and harvest onions.”

By JOHN LESTER TEÑA
Bulatlat.com

MANILA – Farmers group Kilusang Magbubukid ng Pilipinas (KMP) urged the government to establish cold storage facilities for onion as prices continue to soar in the local market.

In a statement, the group said the lack of cold storage onion facilities is one of the primary factors why onions are expensive.

“We can also blame importation, smuggling, and price manipulation for the exorbitant onion prices,” said KMP Chairperson Emeritus Rafael Mariano.

Cold storage facilities are low-temperature-controlled warehouses for agricultural products and other perishable food items.

As of June 22, 2022, the Philippines currently has 151 Department of Agriculture-accredited cold storage facilities. Most of these are in the National Capital Region with 45, Central Luzon with 30, and CALABARZON with 24. According to KMP, this is not enough to avoid the high spoilage of agricultural products produced by farmers.

Mariano said the establishment of cold storage facilities is important as it would lessen the cost surplus of farmers in the middle of the rising demand and prices of agricultural products in the local markets.

“Firstly, it would lessen our cost surplus. We would also be able to guarantee the benefits of these cold storage facilities that it would bring to our farmers, especially here in Nueva Ecija who plant and harvest onions,” Mariano, who hails from Nueva Ecija, said in an interview with ANC.

Mariano said building such facilities is a hefty investment that will require government intervention. Onion farmers also need other support such as fertilizers, he added.

“Investments in planting and harvesting your crops require farmers a lot of money already. If your seedling gets affected by the onion armyworms, you’d be stuck in deep debt. Most of the time, it’s the traders and investors who set the prices,” Mariano added in an interview with ANC.

Smuggling and price manipulation

Mariano stressed that aside from the lack of cold storage facilities, smuggling and price manipulation could also be some factors for exorbitant onion prices.

Philippine data show that only ten percent of smuggled onions from China are apprehended while the remaining 90 percent get sold in retail markets at a high and unreasonable price.

As of this January, local markets register P550 ($9.83) to P600 ($10.73) for red onions and P800 ($14.30) for white onions.

This was worsened by the inflation rate, with the latest peaking at eight percent in November 2022 according to Philippine Statistics Authority – the highest it has been since 2008 under former President Gloria Macapagal Arroyo.

“Traders play a part in controlling and manipulating the prices of onions from the farmgate to retail who use the cold storage facilities to store onions,” he said, adding that the Department of Agriculture knew of this scheme of traders.

Mariano said he believes there is manipulation in onion prices.

“Big Importers, traders, and even smugglers get too much profit because of the excessively high prices of onions. Onion reaches consumers at a high price due to several layers from the farm to the retail stores,” he said, adding that December is the start of the harvest season of onions.

With this, Mariano said the consumers are left with no choice but to buy expensive onions.

“Price manipulation adds to the already wide gap between farmgate and retail prices. Last year, onions sold at an average price of P120/kg ($2.15) even though the farmgate price was at P54/kg ($0.97),” Mariano added.

Store now, pay later

With the continuing inflation of basic commodities, and agricultural products, especially onions, Mariano proposed having a “subsidised store now, pay later” program.

Ideally funded by the national, provincial, and local governments, the proposed scheme would accommodate farmers in storing their onion harvests in the cold storage facilities accredited by the Department of Agriculture while the prices for onions are low.

The decision to pull out the onions from the cold storage facilities would be up to the farmers if the prices of onions are now set to a reasonable amount.

“Our national government or local government units can lend money to the farmers as financial aid in onion production as our farmers wait for the adequate price for selling of onions,” the KMP leader said.

The call for more cold storage facilities in the country has been introduced since 2020, before the start of the COVID-19 pandemic.

Philippine Chamber of Agriculture and Food Inc. (PCAFI) also called for investing in cold storage facilities as it is the way “to reduce post-harvest losses and improve farmers’ income.” (AMU, JJE, RVO) (https://www.bulatlat.org)

Featured image by Paul Magdas on Unsplash

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