Weak onion prices triggers Senate probe

A Senate investigation is being sought into the collapse of onion prices in Nueva Ecija and Occidental Mindoro, which plummeted from P120 to P150 per kilo in January to merely P30 to P40 in February.

Senate Resolution 344, filed by Senator Loren Legarda on Wednesday, directs an investigation into whether the Department of Agriculture strictly adhered to import calibration and cold storage guidelines, consistent with its commitment to halt all onion importations by January to protect local producers from income losses.

“[R]eports indicate a systemic failure in import calibration, where the arrival of approximately 4,000 metric tons of approved buffer imports coincided with the peak local harvest in the Philippines, creating an artificial glut that suppressed local prices,” the resolution reads.

Legarda lamented that the plunge in onion prices—which fell close to the average production cost of P17 to P35 per kilo—put farmers in a “dire economic crisis.” In contrast, retail prices in Metro Manila remained disproportionately high.

Farmgate prices of onions are expected to drop further from this month through April, driven by a peak harvest that has resulted in a surge in supply. The lack of cold storage facilities will aggravate this.

The resolution also calls for an investigation into the so-called “prior booking” system fraudulently engineered by private facilities. This scheme denies farmers storage of their produce during the peak season. As a result, they are forced to sell their produce at lower prices, leaving them with little to no income.

Smuggled onions from China

The crisis was exacerbated by reports of onion smuggling from China that was discovered in Bulacan, which created a “shadow supply.”

These illicit stocks, Legarda warned, artificially inflated market volume, suppressed farmgate prices, and highlighted lapses in border control and regulatory enforcement.

“Why allow importation at the height of harvest? The result is farmgate prices collapsing while market prices remain high. Traders profit, but farmers are left behind,” Legarda noted.

Aside from the steep decline in farmgate prices and the saturation of 82 percent of cold storage capacity, the resolution also cited the overlap of 4,000 metric tons of imports with the peak harvest season.

Despite the DA’s earlier commitment to halt imports by January, data from the Bureau of Plant Industry showed that Sanitary and Phytosanitary Import Clearances were valid until 15 February.

The resolution also calls for imposing an immediate import ban every December to prevent predatory pricing; auditing the value chain to trace profit margins of cold storage operators and wholesalers; reviewing storage capacity in Nueva Ecija and Occidental Mindoro; and assessing other onion-producing areas nationwide for similar irregularities.

“If we do not dismantle the monopoly over cold storage and import permits, this crisis will repeat every year. Government must buy directly from farmers and build farmer-managed storage facilities so they can compete fairly,” Legarda said.

The Food Terminal Inc. (FTI) began buying local onions in Nueva Ecija earlier this week to prevent farmgate prices from free-falling. The same intervention will be conducted in Occidental Mindoro.