Affordable and sufficient food first

With the Philippines facing supply shortfalls and high prices on a number of agricultural and food items, San Miguel Corp. (SMC) president Ramon S. Ang is confident his latest initiatives will help attain the goal of food self-sufficiency for the country in the medium term.

Just recently, SMC embarked on an ambitious multi-billion-peso project to set up integrated mega poultry production and processing facilities in 15 areas all over the country.

These areas are Ilocos Norte, Pangasinan, Mariveles in Bataan, Bulacan, Sariaya in Quezon, Balayan in Batangas, Pasacao in Camarines Sur, Cebu, Barotac Nuevo in Iloilo, Negros Occidental, Sta. Cruz in Davao, Cagayan de Oro, General Santos, Zamboanga and Pagadian.

RSA noted that while the country’s total poultry production is around two billion kilos, consumption is at 4.7 billion kilos, which means that we need to import about 2.7 billion kilos. No wonder dressed chicken, whether whole or cut-ups, are expensive, whether one is buying from the wet market or from the supermarkets.

SMC aims to produce around 80 million birds per year, expandable to 160 million. That indeed is a lot of chicken, enough to bridge the gap between local supply and demand.

As integrated food production facilities, each site will have a multi-tiered broiler facility consisting of four floors, all temperature controlled. At a 30-day growing cycle, RSA says they can do about five cycles a year.

In addition, the facilities will have their own grains terminal, rice and flour mills among others to supply the feed ingredient requirements, and a dressing plant.

RSA also revealed that after two and a half years, they plan to turn over the facility or even sell it to cooperatives.

In an earlier interview, he said that each mega poultry facility, which will be put up at a cost of around $100 million each, will produce 80 million birds per year, with each bird weighing 2.5 kilos compared to the usual 1.5 kilos.

All of these are on top of SMC’s existing poultry processing activities. Its unit San Miguel Foods Inc. (SMFI) controls over 40 poultry processing plants nationwide. Each chicken processing plant is able to process between 10,000 to 50,000 broilers per day.

SMFI’s products and services span across the entire value chain – from animal feeds to fresh chicken and meats to processed meats.

The Philippines continues to be a net agricultural importer, which is not surprising considering the large tracts of agricultural lands that have been converted to subdivisions and other commercial and industrial uses.

Last year, the country brought in more foreign agricultural products than it sells to the world market, translating to an agricultural trade deficit of $8.92 billion, or 39 percent higher than the $6.37 billion deficit recorded in 2020.

In 2021, total agricultural imports were valued at $15.7 billion, or 13.3 percent of the country’s total imports. This is 24.9 percent more than the value of our agricultural imports in 2020.

The Philippines imports 100 percent of its cereals, 99.9 percent of its dairy, 92.9 percent of its garlic, 70 percent of peanuts, 73.2 percent of coffee, 41.4 percent of beef, 27.6 percent of onions, 27.1 percent of tuna, 15 percent of rice, 8.6 percent of corn, 7.1 percent of dressed chicken, to name a few. Except for wheat which we do not produce, most of these imported agricultural products are produced locally but not enough to meet local demand.

It is therefore not a surprise that the Philippines was only 64th out of 113 countries in the 2021 Global Food Security index of UK-based Economist Impact and 146th out of 171 in the second quarter 2022 global food security index of Deep Knowledge Analytics. With an overall food security index score of 5.05 out of a possible 10, the Philippines ranked last among its peers in the East and Southeast Asia.

Our reliance on imports for our food requirements places our country in a precarious situation, and this has become more dangerous for us given the low value of the peso vis-à-vis the dollar as well as the restrictions imposed by a number of countries on their food exports due to continuing uncertainties brought about by the Russia-Ukraine conflict.

Among the countries which have imposed a ban on exports are Afghanistan for wheat, Pakistan for sugar, Malaysia for chicken products, India for sugar and wheat, Argentina for beef meat, Indonesia for palm oil and palm kernel, Russia for wheat and other products, and Ukraine which is the world’s third biggest supplier of wheat, for wheat.

In a recent report from the World Food Programme, it was revealed that based on interview with 2,249 households last October covering all 17 regions in the country, one out of 10 households in the Philippines are food insecure, with the three most food insecure regions being BARMM, Region 8 and 12 which also are among the poorest regions in the Philippines.

The Food and Agriculture Organization explains that a person is food insecure when they lack regular access to enough safe and nutritious food for normal growth and development and an active and health life due to unavailability of food and/or lack of resources to obtain it.

In the Philippines, the FAO found that from 2019 to 2021, 5.3 million Filipinos were severely food insecure while 48 million more experienced moderate or severe food insecurity. Severe food insecurity means that a person either runs out of food or goes an entire day without eating at times.

It said that in the country, the cost of a healthy diet has been consistently rising from P226.60 in 2017 to P242.53 in 2020. This resulted in 68.6 percent of the country’s population in 2020 who cannot afford a healthy diet.

Meanwhile, the World Bank in a December report noted that agriculture comprised less than 10 percent of the Philippines’ gross domestic product and the sector’s contribution to growth is minimal during the past five years.

It also emphasized that growth prospects for the agriculture sector remain poor due to chronic underinvestment and intense vulnerability to weather-related shocks.

Agriculture only has a 1.5 percent share of our national budget compared to Vietnam’s 6.5 percent, Thailand’s 3.6 percent, Indonesia’s 3.4 percent, and Malaysia’s 2.3 percent.

The Department of Agriculture is banking on a 40 percent budget increase for next year to boost domestic production and shore up food security. Let us hope for all our sakes that the president will continue to make agriculture and food his priority, and food security, his legacy.

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