Next crisis being ignored
Urea prices have already jumped more than 40 percent to $700 a ton; international bidding has hit $1,000 a ton.
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Urea prices have already jumped more than 40 percent to $700 a ton; international bidding has hit $1,000 a ton.
The still unresolved war in the Middle East will have as a casualty the Filipino dinner table. In March, Iran closed the Strait of Hormuz to global shipping in retaliation for the US-Israeli airstrikes.
One-third of the world’s seaborne fertilizer trade normally passes through the Persian Gulf, or 67 percent of urea and 20 percent of diammonium phosphate.
The Philippines, which imports 90 percent of its fertilizer needs, is now staring at an impending fertilizer crisis. According to the independent think tank IBON Foundation, the country brought in 7.1-million metric tons of fertilizer from 2021 to 2023, 63 percent of it urea, which is now in shortest supply.
China, the top supplier, has begun restricting exports after its own plants ran short of Middle East feedstocks. Urea prices have already jumped more than 40 percent to $700 a ton; international bidding has hit $1,000 a ton.
The Department of Agriculture offers mild forecasts of input costs rising by P2 to P5 per kilo, with the full blow on food prices landing in the third or fourth quarter.
The government’s answer, predictably, is to import more rice. It is the same reflex that has left the country dependent on foreign grain even as its own farmers are priced out of existence.
Former Finance Secretary Carlos G. Dominguez III, who also served as Agriculture Secretary and still farms, has laid out a blunt diagnosis and a practical cure.
Self-sufficiency in rice is expensive, he noted, but total dependence is suicidal. Japan subsidizes its farmers lavishly, but the Philippines cannot afford that scale.
Yet it does not need to. “If you are self-sufficient in trend and just importing the last 10 or 15 percent of your requirement, you’re okay,” Dominguez said.
Central Luzon’s old rice bowls are being paved over for subdivisions. Mindanao, particularly western Mindanao and Cotabato, has vast untapped land, minimal typhoons and the potential for reliable harvests. What it lacks is irrigation, the one input government alone can provide at scale.
Dominguez argued that the state must stop treating the national budget as a bumper crop of congressional allocations and start treating it as capital for results-oriented investments.
He has suggested professionalizing cooperatives instead of letting farmers manage them; encouraging corporate farming on the Del Monte model; and allowing the leasing of land and machinery so young managers, not aging smallholders, can run efficient operations. The average rice farmer is over 60, whose children are overseas workers.
Unless farming can deliver a middle-class life, no one will stay. Dominguez even offers a ready-made hedge against fertilizer volatility, which is to buy or build a captive supply abroad.
The Philippines once held a 13-percent stake in an Indonesian urea plant under Asean arrangements. It should do this again.
The government merely watched and shrugged when urea climbed from P1,600 to P2,600 a sack.
Fertilizer accounts for 24 percent of a rice farmer’s cash costs, which means the coming harvest will be smaller and more expensive.
Rice and corn, which together use up most of the country’s urea, will push food inflation higher.
The poorest Filipinos, who already spend the largest share of their income on food, will bear the brunt of a war fought on another continent.
Dominguez’s prescriptions of strategic irrigation, professional cooperatives, secure foreign supplies and results-driven budgeting are neither radical nor novel.
While President Ferdinand Marcos Jr. postures on the global stage, our farmers are left to calculate whether they can afford to plant at all.
Food security is not a geopolitical abstraction but a domestic obligation that rests on the shoulders of the Marcos administration.
Failure to act amounts to a dereliction of duty to millions of agricultural families.
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