The National Food Authority (NFA) on Monday said it has urged the private sector to operate the country’s electronic-trading platform for corn to make it efficient.
Allowing the private sector to operate the Enhanced Electronic Trading System (EETS) for corn would facilitate transaction between farmers and corn buyers, according to NFA Deputy Administrator Ludovico J. Jarina.
“We have already met with the producers and the buyers, most especially the feed millers, who are big consumers of corn. We have asked them to organize a team composed of stakeholders, including producers, who would operate the EETS,” Jarina told the BusinessMirror.
With the private sector at the helm of the trading platform, depositing corn stocks and negotiation between farmers and potential buyers would be “smoother”.
Currently, farmers are required to initially sell and deposit their stocks with the NFA, then post their selling price in the electronic board, which is accessible to buyers nationwide. Buyers could also indicate the price they are willing to pay for the corn.
If a seller and a buyer agree to a price, then the NFA would facilitate the transaction. However, Jarina said, the NFA cannot buy corn at a level that is higher than its mandated support price.
“Farmers choose not to sell to the NFA, because they know they can sell corn at a higher price if they go directly to private traders,” he said.
Traders buy white corn currently at an average of P14 per kilogram, a peso higher than the NFA’s buying price of P13 per kg, Jarina said. Yellow corn is currently being bought by traders at P12.50 to P13 per kg, also higher than the NFA’s support price of P12.30 per kg. Because of this, Jarina said the NFA does not have corn stocks in places where are a lot of corn buyers.
“For example, Cebu should have been prepositioned with white corn grains as it is a corn-eating province. But we do not have white corn in our warehouse in Cebu,” he said.
A private-sector led EETS, Jarina said, would allow farmers to sell and deposit their corn at spot prices.
Benefits
The Philippine Association of Feed Millers Inc. (Pafmi) said the e-trading platform would benefit buyers, particularly feed millers, as it would cut production cost. For one, feed millers would no longer have to travel to corn-producing provinces, such as Isabela and Cagayan to buy corn.
Ely Miranda, who represents Pafmi in the Corn Development Fund Committee, said it would also provide an easier payment scheme for farmers, as transactions can be done through bank deposits.
Data from the NFA showed that corn deposits in the EETS have reached 13,691.93 MT to date. However, the NFA said there are no interested buyers for the stocks.
“We have not had successful deals yet. The farmers post their selling price and the buyers post their buying price, but more often than not, they cannot agree on a price,” Jarina said.
“[Also], the system does not operate in real time. It still operates manually using a short messaging system,” he added.
Jarina said the government has allotted P10 million from the Corn Development Fund for the procurement of new software and hardware for the EETS.
The EETS was set up in 2009 to introduce electronic trading in the Philippines and pave the way for the Agricultural Commodity Exchange System (Aces).
Aces was envisioned as a digital platform for trading various agricultural commodities, including rice, sugar and high- value crops. The government had hoped that Aces would enhance the competitiveness of local-farm products in Asean.
“The plan back then was to develop an electronic-trading system starting with corn, and then other commodities, like rice and sugar. After these systems mature, it was seen to develop into the Aces, which will include other commodities, as well,” Jarina said.
However, the government could not follow through on its plans for the Aces as the corn platform has yet to take off.
