Corn farmers fear losses of up to P15 billion

MANILA, Philippines - Corn farmers are fearing losses of up to P15 billion in the second half of this year due to the decision of the government to extend further the zero tariff duty on corn imports.

According to Roger Navarro, president of the Philippine Maize Federation, “we estimate that our farmers will lose P5/kilogram considering the cost of production and the cost parity to import.”

Consequently, Navarro added, “some P150 billion of rural economic activities will be lost throughout the country as a result of EO765, not counting the P1-billion lost tariff revenue of the government that could have been used to finish the planned post-harvest facilities, farm to market roads and irrigation projects of the Department of Agriculture that remained unfunded due to misguided priorities and huge budget deficit.”

Navarro warned that “the Philippine corn industry is facing a precarious situation that may turn into a full blown crisis.”

Local corn prices, Navarro said, have fallen to its lowest level since 2001 while production is turning out to be record-high.

Yellow corn production, mainly used for feeds, is expected to breach three million metric tons for the second semester of 2009.

Navarro lamented the policy recommendation of the Department of Agriculture to allow zero-tariff on feed wheat importation without prior consultation with the vulnerable sector affected.

PhilMaize, Navarro said, is urging Agriculture Secretary Arthur Yap to “exercise expediency and resolve to mitigate the negative impact of the ill-advised policy that originated from his department that ultimately resulted in the issuance of EO765 signed by President Arroyo at the expense of our local corn farmers.”

Navarro explained that soaring costs of farm inputs discouraged many farmers from planting corn late in 2008, while severe La Niña inundated the corn belts with too much rain disrupting proper pollination for corn to produce normally, and peace and order problems displaced many corn farmers in Mindanao.

Thus, the government projected a production shortfall of 800,000 metric tons of yellow corn in the first half of 2009.

As early as July 2008, Navarro recalled, PhilMaize already gave clear warning to Yap in a series of meetings and several follow-up meetings that lingering low corn prices at P10/kg ex-farm discouraged many corn farmers to plant.

The low price, Navarro said, was not enough to overcome the increase in cost of production.

Ironically, Navarro cited, world market prices for corn in 2007-08 hovered above P20/kg even at zero-tariff.