Aug 5, 2008


Philippines grants higher support price to corn farmers


The Philippines is increasing its buying support price for corn by up to 73 percent in a bid to encourage local farmers to continue planting the crop, Agriculture Secretary Arthur Yap said Monday (Aug 4, 2008).


The state-owned National Food Authority (NFA)'s buying price for corn has been pegged at PHP13 per kilogram for white corn and PHP10/kg for yellow corn, Yap told reporters. The support price was previously PHP7.50/kg.


The new support price was at the level corn growers had been previously asking for, with many complaining that the previous price was too low. 


"The increase was approved last week by the NFA council. There's a requirement for publication after which, it will be implemented," he said. Yap heads the NFA council.


While the new support prices are significantly higher than the previous level, the department is willing to study a demand by local farmers for an increase in the support price for yellow corn to PHP13/kg. Yellow corn is mainly used as animal feed.


Yap said the proposal would be studied and the Department would be sensitive to their pricing. However, he added that farmers are currently getting good market prices, regardless of the government's support price.


Local corn farmers have said they will continue to press for a higher government support price for the grain due to rising costs of inputs, especially fertilizer.


Industry executives said they may export their grain unless they get good a support level for their crops.


"As long as there are buyers and they have a good price, we will let them (export). At the end of the day, the objective of agriculture secretary is to stand accountable on how the sector increased output and farmers' net income," he added.


Last week, the agriculture department said the surging cost of fertilizer could deter farmers from planting the crop in the second half of the year. This could prevent the country from achieving its output target for 2008. Petroleum-based fertilizer is currently priced at PHP2,000 a bag, up from PHP1,200 a bag a year earlier.


Corn output this year could reach only 6.9 million to 7.2 million tonnes, below the department's production target of 7.35 million tons, said Assistant Secretary Dennis Araullo, programme director for corn.


About 10 percent to 30 percent of the normal planting area may not be planted to corn in the second half of the year following the steep increase in fertilizer prices.


Nevertheless, corn output in the first half of the year reached 3.29 million tonnes, up by almost 20 percent from an output of 2.75 million tonnes a year earlier.

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