August 27, 2008


Philippines mulls 30-percent corn intervention price hike


The Philippine Department of Agriculture said Tuesday (August 26) it was seriously considering a demand made by local corn farmers to increase the government intervention price for corn by 30 percent.


Last week, corn farmers said output in the second half of the year could fall by up to 23 percent on-year unless the government hikes the price it pays farmers for yellow corn - called "price support" - to PHP13 (US$0.28) a kilogramme from PHP10/kg.


The Inter-Agency Committee on Rice and Corn is scheduled to meet this week to discuss the issue, said agriculture assistant secretary Dennis Araullo, the programme director for corn.


"The (desired) support price is under consideration. We want to come up with a win-win situation," Araullo said.


Reduced output would boost local corn prices to as much as PHP18/kg, compared with prevailing rates of PHP11/kg, said Roger Navarro, president of the Philippine Maize Federation Inc., or Philmaize.


"We want to avoid as much as possible a dramatic increase in corn prices because it will affect our livestock and poultry sectors," Araullo said.


Demand for yellow corn is expected to rise sharply in the second half of the year as livestock and poultry raisers build their inventories ahead of Christmas and New Year holidays, he said.


Farmers said the high cost of petroleum-based fertilizer is pushing input costs up, necessitating a higher support price.


In late July, the National Food Authority, a state-owned grain trading firm, increased its price support for yellow corn to PHP10/kg from PHP7.50/kg, citing higher input costs. At the same time, the white corn support price was raised from PHP8.50/kg to PHP13/kg.


Philippine corn farmers have said the yellow corn price increase was not sufficient.

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