September 17, 2008

Philippine government backs corn farmers' proposal to increase prices

Philippine Agriculture Secretary Arthur Yap said Tuesday (September 16) he will support a proposal made by local corn farmers to increase the government "support price" to keep production from falling amid rising input costs.

"I'm supportive of looking for the right price for corn. To send a signal (to the local market), the price must go up," said Yap.

Price support is the level at which the state-owned National Food Authority(NFA) buys corn in the local market to support prices during peak harvest season.

Local farmers have been seeking a 30 percent increase in the government's buying support price for yellow corn to PHP13 (US$0.27) a kilogram from PHP10/kg due to the soaring costs inputs, mainly fertilizer.

Local growers have projected that corn output in the second half of the year could fall by up to 23 percent on year unless the proposed hike is implemented.

"If we can encourage good production of corn...that's going to help in the country's food security," Yap said.

The Philippines cultivates both white corn, which is used for human consumption, and yellow corn, which is a major component in animal feeds.

In late July, the NFA 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.

Corn farmers have claimed that the price increase for yellow corn wasn't sufficient.