Dutertenomics: Sustaining the  Economic Gains
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The price of gasoline nudges up a little bit by 50 centavos  and newsreaders hyperventilate  in breaking the story.

If  the cumulative increase  in a given period reaches P3,  transport leaders  outshout themselves in  clamoring for a fare hike, creating a racket  louder than  a dozen buses  honking  their horns to call passengers.

Now that diesel is P25 per liter and gasoline is less than P35 per liter,   car owners are heaving a sigh of relief, not knowing that money saved from low fuel prices  is eaten up by  longer time on gridlocked roads.

But there is one  oil-benchmarked  commodity whose price is not heading south—fertilizers.

Surprisingly for a country where three in 10 workers  are in farms and whose  output accounts for 12 percent of the  economy,   there is no clamor, not even a muted hoot, for lower fertilizer prices.

A dancing cat may draw a million likes in Facebook,  or a cute  quip of a presidential hopeful could  trend, or  the rendezvous of two TV lovers  will  unleash  six million sugary tweets.  Not fertilizer prices. In social media metric, fertilizers are not only bland but boring.

But it shouldn’t be. The  unli rice we eat while we fidget with our smartphones are produced   with the aid of fertilizers.

Most of us may be clueless about it, but the truth is food prices and farmers income are influenced  by   fertilizer cost, and the latter, in turn,  by oil prices. 

This is so because  fertilizer prices shadow  oil price movements, in theory and in other countries at least.  But it seems that the Philippines is firewalled from this trend.

Take for example India’s case.  There,  a  bag of   “complete” or 14-14-14 fertilizer fetches  the equivalent of P596 there.

Here,  it’s  P1,116.  A bag of Urea in Bollywood-land costs half than  the August local price tag of  P1,006.

For the latte-sipping  coffeehouse  crowd, P500 won’t amount much, but for rice farmers  it spells the difference between a good season or a bad one.

Twenty percent of rice production cost goes to fertilizer. It’s the second biggest expense after hired labor, which corners 40 percent.  Ideally, six bags of fertilizers are recommended for one hectare. 

But if there’s no money on hand or the roving 5-6 cash machine  can’t be found, chances are the farmer would scrimp on  fertilizer, broadcasting four bags instead of six.

The result is lower yield  for the farm,  smaller  income for the farmer, and  higher market prices, because, if we remember our high school economics lesson,  price movements are inversely proportional to supply.

Luckily for us, prices of fertilizer have also been known to move  due  to government pressure.

It was reported that in 2008, the Department of Agriculture  skilfully but sans fanfare  negotiated a 43-percent  rollback   in the prices  of fertilizers.

The DA’s argument  then  was that fertilizer rates should mimic oil prices which  by then had gone down.

The same pitch can be used today.  The  conditions obtaining  then are present now.   You don’t have to Google global prices of crude to be educated   of  its freefall.  You only have to  drive up any gas station to remind yourself  that  a liter of  local mineral water is now more expense than a liter of  imported diesel.

The DA  at that time may have been reeling  from the liquid fertilizer scam, with its infamous  tubong-lugaw formulation,  yet  it was able to muster will to bring down the prices of  real  fertilizers farmers   need. 

The present  government has enough political capital to  wangle  good  fertilizer prices for farmers. And if  it is in search of  a miracle fertilizer  that will  make  the ratings of its  candidate for 2016 shoot up fast, then  it  knows  what it is—the one 20 million rural voters use.

But this is all about  good economics and not about  political tactics.  There is a case for  lower fertilizer prices.

By the way, the  agency responsible for fertilizers  is the Fertilizer and Pesticides Authority, which has been placed under the Office of the President. 

Despite the  “authority” written on  its shingle,  FPA    cannot mandate  fertilizer prices. It can only monitor them.  What it can surely provide is  historical  data to support  that  local fertilizer prices have been  resistant  to cheap oil.

Well, it can also  be argued that the cut in fertilizer prices is not  as hefty as some groups are  proposing.  This is possible. But what can’t also be ruled  out is the need to start a national conversation on fertilizer prices.

‘‘Presidentiables”  should heed the cue and take the lead.  So must the rest of the political species  who  would rant and rave and call for a probe at the drop of a hat.

In this season of premature campaigning ruled by style and spin, this is one issue that can cure the deficit in substance. If your agricultural  platform is weak and thin, and suffering from an El Niño of ideas,  then  sprinkling it with a dose of fertilizer could be the nutrition it needs.


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