By Kyle Aristophere T. Atienza, Reporter
THE GOVERNMENT needs to address logistics bottlenecks and build more storage facilities to avoid wasting the tomato surplus, industry representatives said.
The government needs to focus on “small- or medium-sized basic logistics infrastructure for clusters of production areas,” according to retired agriculture professor Roy S. Kempis, who is now the director of the Center for Business Innovation at Angeles University Foundation.
The farmgate price of tomatoes in some parts of the country last week fell to as low as P4 per kilo due to excessive supply, with some volunteer groups having to connect producers directly to consumers online.
Mr. Kempis said in an e-mail that the Department of Agriculture (DA) could subsidize refrigerated trucks for produce that is bound to points of mass consumption.
He said the private sector should also be encouraged to operate small- to medium-scale warehouses and invest in transportation assets like four-wheeled or six-wheeled vans.
With such investments, “Wastage in the form of unusable and rotten produce like tomatoes can be minimized.”
The government should also help farmers bring and sell their tomatoes wholesale to processing or manufacturing plants for products that use tomatoes.
Agriculture group SINAG told BusinessWorld on Sunday that there is still an oversupply of tomatoes, with the produce being sold for very low prices or given away for free in Nueva Ecija, Nueva Vizcaya, and Pangasinan.
It said a 22-kilo crate of tomatoes is selling for as little as P80. “Others are direct buying at P8-10 per kilo.”
Rural Rising Philippines said Saturday that middlemen have been paying farmers only P2 per kilo in Nueva Ecija.
“With that, you can pay only for the rent of the tricycle that brought your tomatoes to a market and a meal at a carinderia,” according to the group, which has been facilitating rescue buys.
“It costs the farmer more to harvest it than to sell it.”
Tomato retail prices hit P360 per kilo last month amid tight supply.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in the face of supply bottlenecks that result in huge increases or decreases in vegetable prices, “digitization of agricultural trade is the way to go.”
Digitalizing the trade would democratize the marketplace and efficiently bridge perishable agricultural products from sellers with surplus to buyers or areas with tight supply, he noted in a Messenger chat.
“Digitization would help address the gaps in the marketplace, with cold storage facilities and processing facilities among the intervention measures,” he said.
“Digitalization is the means, but we still need the human connections to make it work,” Ateneo de Manila economics professor Leonardo A. Lanzona said via Messenger chat.
“The best way is to send experts across the different regions to determine the barriers and the solutions,” he added.
Mr. Lanzona noted that the distribution problem largely stems from the country’s archipelagic landscape, and it did not help that the government has failed to “develop institutional mechanisms that can reduce transportation and transaction costs.”
“We need to strengthen our institutions that can correct these geographic and cultural challenges,” he said. “What separates a developed and a developing country is the quality of institutions.”
Meanwhile, Mr. Kempis also pitched price support for farmers dealing with low farmgate prices of their produce.
“The amount of price support can be recovered from the price differential when tomatoes are sold at a higher wholesale price in areas where final consumption happens,” he said.
The DA last week urged tomato farmers to work with municipal or regional agriculturists for direct market linkages, noting that the government can market their produce in nearby markets or Kadiwa centers.
Agriculture Assistant Secretary Arnel V. de Mesa cited the need for cold storage facilities due to the seasonality of agricultural commodities like tomatoes.
The DA is hoping to inaugurate a 5,000-ton capacity cold storage facility in Taguig City by 2026.
