The Department of Agriculture (DA) has allocated P85 million in grants to help onion farmers cooperatives and associations (FCAs) cope with the plunge of prices of the commodity due to oversupply.
The DA issued Memorandum Circular (MC) 14 that outlined the guidelines for the implementation of the grant program titled Enhanced Kadiwa: Sagip Sibuyas Project.
The DA explained that the project seeks to “address the pressing needs” of onion farmers due to “overproduction” that resulted in the decline in farm-gate prices.
Under the program, the beneficiaries of the financial grant shall be FCAs and their respective farmer-members in the regions of Central Luzon, and Mimaropa.
Eligible FCAs may receive a maximum grant amount of P5 million, according to the DA.
“An eligible FCA shall use the financial grant for trading capital to cover all or combination of the following costs: procurement cost of onions bought directly from farmers; attendant direct costs in hauling and delivery to markets and/or cold storage facilities; and cold storage rental fees,” the document read.
Based on the DA’s funding allocation, a total of 9 FCA beneficiaries in Central Luzon will be chosen, while 8 FCA beneficiaries in Mimaropa will be accepted under the grant program for a total cost of P85 million.
The DA said it would source the P85-million project funding from its P250-million locally funded projects for the implementation of the Kadiwa ni Ani at Kita program.
“The DA through the RFO will directly transfer/release the grant funds to eligible FCAs,” it added.
Interested beneficiaries must be duly registered with the appropriate government agencies such as Securities and Exchange Commission, Cooperatives Development Authority, among others.
The FCAs must also be composed of small agricultural producers, farmers, farmworkers and agrarian reform beneficiaries.
The DA said FCA beneficiaries must buy all the onions from their farmer-members or farmers in general at a farm-gate floor price set by the department’s Regional Field Office (RFO). The farm-gate floor price will be based on actual production cost of the onion farmers in the two regions.
“The onions bought by the FCAs shall then be marketed in food markets or to buyers, or stored in cold storage facilities while waiting for better prices,” it said.
“A portion of the total onions bought may also be used by the FCAs in extending assistance to indigents through ‘community pantries’ or similar activities where onions will be or sold at discounted prices,” it added.
The DA said FCAs that previously availed of a grant under the Enhanced Kadiwa Financial Grant Program may still avail of the grant under the Sagip Sibuyas project provided that they were able to fully liquidate their previous grants and received satisfactory evaluation from the RFOs.
Earlier this month, some onion farmers in Mindoro were forced to abandon or sell their produce at a loss as price of the commodity fell to P12 per kilogram to P15 per kilogram, which was below the breakeven cost of P18 per kilogram.
The average price of onions last year was at P42 per kilogram, according to DA. The decline in farm-gate prices was a result of onion oversupply due to higher output driven by new players in the industry, the DA added.