DA eyes G2G deal for fertilizer in January

MANILA, Philippines — The Philippines hopes to finalize and secure government-to-government (G2G) deals for fertilizers in January to help lower input costs and, in turn, raise yields of farmers.

Last July, President Marcos laid down the possibility of G2G negotiations to help reduce government expenditures aimed at subsidizing raw products, such as fertilizers.

The Department of Agriculture (DA) has ongoing discussions with possible sources of fertilizers in time for the rollout of the 2023 budget, DA assistant secretary for operations Arnel de Mesa said.

“We are looking at all countries because the President ordered to get the cheapest,” he said.

“For the G2G, the lower the price, the higher the volume we can get. That’s also what the President wants, to get lower prices and higher volume,” he said.

De Mesa said the agency is also finalizing the volume, and how much should be allotted to inorganic and other forms of fertilizers.

Latest monitoring of the Fertilizer and Pesticide Authority (FPA) showed the average price of urea in the country is still elevated, albeit steady, at around P2,500 per 50-kilogram (kg) bag.

Whereas the price in other countries is around P1,800 per 50-kg bag, the DA official said.

The DA hopes to lock in low fertilizer prices as early as possible ahead of the rollout of fertilizer discount vouchers to farmers next year.

“So we’re looking what’s the most advantageous to government. The target is to finalize this in January,” De Mesa said, noting this is the optimal time to secure the deal before the wet season planting starting March.

The DA increased the fertilizer subsidy from P1,131 per hectare for areas planted with inbred seeds and P2,262 per hectare for hybrid to a uniform P6,600 per hectare for both inbred and hybrid farm areas.

This was after the agency issued a new order in October, setting a P4.1-billion additional budget for a new round of fertilizer discount vouchers to be distributed to rice farmers under the National Rice Program (NRP) to raise yield next year even as fertilizer prices remain elevated.

“We started releasing the vouchers and the result of the G2G deal will be for next year implementation as instructed by the president,” De Mesa said.

Earlier, the FPA urged government to pursue G2G deals for fertilizers by opening up bilateral agreements with countries producing fertilizers for lesser acquisition cost.

It also recommended the setting of suggested retail price (SRP) and maximum retail price (MRP) on a per region basis to mitigate the spike in prices of fertilizers and its raw materials.

In setting the SRP and MRP, FPA said the said retail prices should be computed based on the location where the fertilizers are locally sold.

The FPA also said the government should improve monitoring of fertilizer prices from imports to recording of dealer’s prices.

The agency said the country should also introduce the practice balanced fertilization strategy to lessen the impact of high fertilizer prices.

To lessen dependence on chemical fertilizers, government should also explore the use of alternatives like organic, microbial, and biorational fertilizers, the FPA said.

The country is heavily reliant on imported fertilizers and its raw materials, which makes it vulnerable to the rising fertilizer prices.

The FPA said the prices of fertilizers sharply increased worldwide as the COVID-19 pandemic caused shortages around the globe, higher input costs and fuel prices, disruption of production and trade, as well as the impact of the Russia-Ukraine war.

Results of the study revealed that import prices vary from country to country and started to increase in early 2021.