Agriculture Business Week

The bane of domestic corn farmers in the past has been the propensity of big users of corn to dangle the importation card whenever domestic corn prices are in the upswing.

For whatever reasons they have, the members of the Philippine Association of Feed Millers, Inc. (PAFMI) through their association president recently announced that they will not be importing corn in the near future (Philippine Star issue of August26, 2008, p. B2). This is truly one of the better news our farming communities have been waiting for.

The bane of domestic corn farmers in the past has been the propensity of big users- of corn to dangle the importation card whenever domestic corn prices are in the upswing. Farmers not able to sustain their momentum as big users would ask for imports as an alternative to rising domestic corn prices. But things had changed in the worldwide commodity markets, making importation a not-so-attractive option anymore.

The World Bank, in an article published in the Forbes Asia issue of Sept. 1, 2008 estimated that between 2004 and 2007, the world production of corn increased by 51 million tons, and at the same period, use of corn for biofuel in USA alone increased by 50 million tons, leaving meager resources to meet the estimated increase of 33 million tons for food requirements unserved.

The increasing demand of corn for biofuel use in many parts of the world had undermined the supply available for food requirements, as in the case of Canada, which is now unable to export corn to meet the requirements of their local ethanol plants.

Demand for corn for food requirements has been increasing in the newly developed economies of India, China, and of late, Russia. However, on the other end of the spectrum, is the inability of traditional exporting countries to position themselves to meet the increased corn demand as they are filling in their own requirements for other corn uses.

To this end, our domestic farmers are in a best position to fill-in the increasing demand from local poultry and livestock producers that used to import corn and other substitutes.

The heart of the situation is how to disseminate this information and make farmers react and do their planning to meet this challenge of no-corn importation.

The announcement of no-corn importation was relegated to a small portion of a national newspaper, and did not merit an enthusiastic praise or reaction from the farming sector probably for lack of more information.

The bureaucracy must seize the situation, knowing that there is a market to absorb local production which had turned out to be highly competitive now versus imports. It should use its organization in marshalling people and resources to meet the challenge of fully supplying domestic.

Corn production is second nature to our farmers. Given the right seeds and technology, they had shown that they can increase their unit productivity. But in the process, they got stymied of falling prices whenever they have a bumper crop. Problems seem to abound every time they have good harvests.

Again and again, our farmers, as in the case of Tarlac, can shift from one crop to another with ease. Fields of corn sprouted all over the province, making it for a while, the biggest corn producer in Central Luzon, when demand from local feed millers peaked. This was also true in Pangasinan, where vast tobacco land were made into cornfields. And in some areas, corn is produced in three cycles a year. And many more areas, especially in the fertile land of some Mindanao provinces, waiting for the right opportunity to cash in the corn planting venture.

It is at this instance that the bureaucracy can show its sincerity by sustaining its investments in infrastructure where farmers can have easy access both to input suppliers and markets. It must encourage investment (which need not be on concessionary terms) in dryers and warehouses and the like, to preserve productivity gains at the farms.

An accessible market is the best motivation for farmers to produce more. Higher productivity translates into lower cost, though not necessarily higher profits. Prices are dictated by market forces. And in the present state of things in commodity market, as in the case of corn, farmers are bound to get a fair return on their investment in corn planting.

The issue of prices is an economic dictated matter. Hence, attention should be on increasing farm efficiencies to meet this challenge of no-corn import position of the feed millers and the poultry and livestock sectors.

And why not?