P27 billion to fund fertilizer subsidies

MANILA, Philippines — The government would need to provide around P27 billion worth of fertilizer subsidies for palay or unhusked rice farmers to support their production this cropping season as fertilizer prices continue to rise, the Federation of Free Farmers said.

FFF national manager Raul Montemayor said that a P10,000 per hectare subsidy is needed to cover the increases in the prices of fertilizers.

“If a farmer uses six bags of fertilizer, and the cost has increased by P1,500 per bag on the average, total additional cost is P9,000,” Montemayor said.

“We round it off to P10,000 to account for cost increases for pesticides, fuel, etc.  If we subsidize this, the cost will be P27 billion,”he said.

Latest data from the Fertilizer and Pesticide Authority (FPA) showed that the average price for a 50-kilo bag of granular urea registered at P3,002.17, while complete fertilizer costs P2,212.15 from May 16 to 20.

This is more than double the granular urea price of P1,115.52 per bag and P1,094.48 per bag of complete fertilizer in the same period last year.

Fertilizer prices in the international market have been rising since last year mainly due to larger demand from countries, as well as higher freight cost.

Montemayor said the P27 billion budget would cover 2.7 million hectares of palay to be harvested in the second semester of production.

He said that if fertilizer subsidies are not provided, the country could see a drop in palay production as some farmers would not be able to handle the rising input costs.

“At P17 per kilo value (farmgate price), that will be a value reduction of almost P18 billion,”Montemayor said, referring to the 1.1 million MT potential production decrease.

If local production goes down and international prices go up, domestic rice prices are seen to increase.

“ The potential losses can be much larger, not counting additional social and political costs,” Montemayor said.

“With the impending food crisis, we can’t afford to be dependent on imports for our food. We are putting our nation at the mercy of importers. We don’t want to discourage our farmers from producing, because if the global market is unstable, we won’t have many options left to us,” he said.

Dar earlier said an additional P6 billion fertilizer subsidy budget for the wet planting season was earlier approved by President Duterte as part of the Plant Plant Plant 2.

Apart from the provision of fertilizer subsidies, the government has also been in talks with fertilizer-producing countries for the procurement of fertilizer. Among these are Russia, Malaysia, Indonesia, Thailand and China, according to the FPA.

Dar also said the government is promoting the balanced fertilization strategy, which refers to the combined application of organic and inorganic fertilizers based on crop and soil nutrient content.