IT was the appeal issued by the Department of Agriculture’s Agribusiness and Marketing Assistance Service (DA-Amas) to potential institutional buyers that highlighted the oversupply problem now confronting Luzon mango growers. Luzon, one of the three major islands of the Philippines, where many top mango-producing provinces can be found, did not know where to sell its excess supply. The DA estimated that some 2 million kilograms would have to be sold immediately before the mangoes rot.
Oversupply happens when output overshoots demand. Mango supply is abundant because the weak El Niño made it easier for planters to produce more mangoes. The fruit can be grown all year round and is known to be tolerant to dry spells. Unfortunately, farmers could not immediately unload their harvest as the months of March to June are considered peak season for mango—a period when it is usually difficult to find buyers who could offer a better price for their crop (See “Japanese firm to buy PHL’s excess mango,” in the BusinessMirror, June 7, 2019).
This is the first time in recent years that the government has complained of a mango glut. Data from the Philippine Statistics Authority (PSA) revealed that from 2016 to 2018, mango production has been on the downtrend, with the steepest decline recorded in 2016, when output contracted by 9.83 percent. In the first quarter of this year, total national output was also lower by 2.85 percent.
It probably came as a surprise even for the government to learn that there is a glut. The appeal issued by Amas only goes to show that mango farmers have yet to tap into potential bulk buyers, such as restaurants and institutions. A marketing program launched by the DA allowed farmers to unload their excess production. The attention given by the local and international press to the country’s mango predicament has helped pique the interest of foreign buyers.
But there are no institutional mechanisms in place to prevent and deal with oversupply. Farmers are practically blind when it comes to production because the Philippines lacks an agriculture market data system, which would have allowed planters to control production volume. What compounded the situation for farmers is that many have not yet learned to add value to their crop.
The DA is encouraging farmers to go into value adding, but it should do more than just conduct information and education campaign. Government agencies must get their act together and find a way to deliver the support required by farmers who wish to produce other food items from crops grown in their field. Incentives or financial support will also go a long way in encouraging aspiring entrepreneurs, as well as easing requirements to obtain credit from formal institutions.
Because foreign markets afford better income opportunities, the government must find a way to enable planters and other food producers to export their products. The Duterte administration is on the right track in forging trade agreements with potential markets for Philippine-made products, such as South Korea. Planters are looking forward to a free-trade agreement between Manila and Seoul as they have long been targeting to expand shipments of tropical fruits, such as bananas, to South Korea. But unless these would actually benefit local producers, trade agreements are nothing but worthless documents.
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