Philippine agriculture experts: More fertilizer subsidies seen needed to shield farmers from high global prices

Increased fertilizer subsidies are required if farmers are to deal with higher global prices for the farm input, agriculture experts said, after a key Senator called for immediate government intervention to prevent farmers from going further into debt for the next planting season.

“Current fertilizer prices are burying local farmers deeper in debt even before they can press their rice seedlings into the ground,” according to Senator Maria Imelda Josefa R. Marcos, who chairs the Senate committee on Economic Affairs, speaking in a statement Thursday.

Fertilizer and Pesticide Authority (FPA) Executive Director Wilfredo C. Roldan told BusinessWorld via Viber that six months ago, the price of urea, which has about a 50% market share in the Philippines, cost P850 per bag, but is now selling for around P2,300.

Any subsidies provided should correspond to the rise in import prices, he said, to ensure farmers are not disadvantaged. If not, farmers may reduce the usage of fertilizer or plant less, which will depress yields and raise consumer prices.

Ms. Marcos also cited complaints sent to her office that fertilizer prices have risen sharply.

FPA data indicate that a 50-kilogram bag of Complete Fertilizer, known in the trade as 14-14-14, now costing P1,750 from P1,063 in January. The 16-20-0 fertilizer variety now sells for P1,650 from P987 previously.

Agriculture Assistant Secretary Noel O. Reyes told BusinessWorld in a Viber message that the increase in prices is due to strong fertilizer demand in India, Australia, the US, and Brazil, while big suppliers, like China and Russia, are withholding their exports to ensure their domestic requirements are met.

With the scarcity and rising demand, prices will inevitably rise, Mr. Roldan said.

“We also have no control over international pricing, no leverage to buy at (a) lower price because our volume is very small, (and) no leverage as a priority,” he added.

He noted that the Philippines purchases only 2.6 million metric tons a year, while neighboring countries like India purchase about 5 million metric tons.

“We need to protect our local farmers to attain food sufficiency and security by producing our own fertilizers,” Ms. Marcos said.

Mr. Roldan proposed developing indigenous fertilizer as a long-term plan, while alternatives to imports should be explored.

Agriculture Secretary William D. Dar has urged farm cooperatives to import fertilizers directly from international producers and suppliers.

Mr. Roldan, who supports the cooperatives’ involvement in imports, said this channel is more direct and may save farmers money.

Mr. Reyes said farmers are currently being provided seed and fertilizer subsidies through vouchers, which amount to P2,000 for those who plant inbred rice and P3,000 for hybrid rice. The vouchers are authorized by the second stimulus package known as Bayanihan II.

New subsidies are being proposed for approval by Congress in the 2022 budget, he added.

The Senate is hoping to approve its version of the 2022 General Appropriations Bill by the end of the month and reach bicameral approval by the first week of December.