LA TRINIDAD, BENGUET – Farmers and traders are locked daily in a price war over the costs of vegetables sold in wholesale at the La Trinidad Vegetable Trading Post here.
When the haggling gets done, the traders are often seen counting more fingers than farmers who would simply scratch their heads.
The price system, officials said, needs the government’s attention, particularly now that the administration’s poverty mitigation and food security agenda are all on board.
But who are to blame for the price changes?
The farmers and traders accuse each other. But the spin from the industry’s stakeholders is that price changes are not simply due to the law of supply and demand.
Felicitas Ticbaen, municipal agriculture officer, said that the law of economics dictates vegetable prices. “When there is enough supply but less demand, the prices go down. When there is less supply but high demand, the prices go up,” she said.
Others point to the middlemen. They said prices seesaw from loss to gain and gain to loss based on the middlemen’s wishes, which were more often to the farmers’ woes.
The structure of the trading system allowed middlemen to lord over the prices, said Patricio Ananayo, chief of the Department of Agriculture’s agribusiness marketing assistance division in the Cordillera.
Most often, the farmer’s desire to sell their products at higher prices is breached by middlemen, he said.
“Farmers prefer a single transaction for their harvests. They want their vegetables to be sold right away so that they could buy food, farm inputs, and supplies and go home right away,” he said.
The selling price of their harvests, Ananayo said, then becomes a case of “hit and miss.” “When they unload their vegetables at the trading
post and the prices are high, they hit big time,” he said.
The province produces cabbages, potatoes, cauliflower, Chinese cabbage, carrots, chayote, broccoli, cucumber, lettuce, celery, onion leeks, sweet pepper, radish, sweet peas, and beans.
More than one million kilos of vegetables are hauled to the trading post daily, making life busy for more than 2,000 stakeholders, according to Dominador Dongla, the trading post’s chief market inspector.
But when these vegetables hit Manila’s wet markets, the mark up
prices are very high.
Department of Agriculture Sec. Arthur Yap was himself aghast to find out that the prices of vegetables at the trading post here were low compared to their selling prices at the metropolitan area’s public markets.
Take note of the prices: Cauliflower, which costs P15 – P18 a kilo here, would be sold in Balintawak, Quezon City at P40. Broccoli, purchased at P40 here, would be sold at Divisoria, Manila at P50 a kilo.Carrots bought at P8 to P10 a kilo would be sold in Manila at P18 a kilo.
But who is gaining?
Loreto Buyaan, Benguet Farmers Federation Inc. (BFFI) public relations officer, said middlemen are reaping the benefits of the price system.
He said that middlemen set the price trend, leaving no choice for farmers but to sell their crops at prices that could not recoup production costs.
Sen. Manuel Roxas gave a more profound explanation of the system when he visited the trading post here last September.
He called the farmer-trader relationship an “asymmetric power structure,” where the farmers are left with no bargaining power to dictate the prices.
“To empower the farmers in the game of pricing, this structure must be overhauled in favor of the farmers,” he said.
Jose Andiso Sr., BFFI president, said that while the law of supply and demand is often blamed for the fluctuation of prices, the traders actually dictated prices more often from the supply side of the equation.
“The traders tend to create the impression that there is overproduction to give them more opportunities to haggle for lower prices,” he said.
“Their bias for the supply side is reflected in the manner they negotiate with farmers. They insist on saying there is too much supply.”
Andiso accused middlemen of dishonesty.
He said: “Traders must be honest to state the actual demand so that the farmers will not simultaneously bring their harvests at the trading post and create oversupply. This has [given] farmers no option but to bargain for lower prices.”
But middlemen do not buy the charges.
Jonathan Tercero, Bagsakan Traders Association president, said that the middlemen’s role in the price war is inherent in the trade system of vegetables, hence, traders must not solely be blamed.
“The buyers to whom we deal the farmers’ harvests hope to cash in on quality vegetables sold at reasonable prices,” he said. “We can’t deal to them the farmers’ crops at very high prices because they, too, have to consider the buying capacity of their customers in Manila.”
Tercero said middlemen have to balance the interests of buyers and farmers by coming up with prices that are mutually beneficial to both stakeholders.
He dismissed speculations that middlemen are the ones jacking up the prices since they only add P1 to P2 per kilo which, he said, is a reasonable margin of profit.
But how do middlemen dictate the prices for the day?
Tercero said vegetable prices are usually determined at six to seven in the morning by experienced traders who observe the volume of vegetables delivered matched with the day’s business tempo.
And with the help of yesterday’s prices, these traders, he said, could now put the price tag on the day’s first transaction.
Tercero said the price would spread like a gospel word among all traders within and near the more than 9,000-square meter trading post.
The ones dictating the prices, he said, are experienced traders who, by sheer observation, could already approximate the prices for the day.
“We call them doctors of vegetable prices,” Tercero said.
Gov. Nestor Fongwan believes that the province’s vegetable industry must become market driven to correct the flaws of the pricing system.
He said that the only time the farmers could dictate vegetable prices is when the province has completed its vegetable profiling and crop programming.
The launching of a P4.4-million vegetable profiling program this summer marked the province’s first serious bid to come up with specifications for vegetables at the grassroots level.
The program is expected to boost the DA’s intervention measures designed to provide farmers with direct access to Metro Manila’s markets in an effort to skip several layers of middlemen.
There’s the so-called modernized talipapa (satellite markets) system, Bagsakan Centers (drop-off points), and the Barangay Food Terminals (BFT).
There are 12 BFTs and 19 Bagsakan Centers in Metro Manila. These markets service the metropolitan area’s three biggest wet markets — Commonwealth (Quezon City), Mutya ng Pasig (Pasay City), and the Pamilihang Bayan ng Muntinlupa (Muntinlupa City).
These markets service 13 retail outlets and 24 service areas, the DA said.
The BFTs, which are barangay based food depots aimed to complement the talipapa, have a potential market of 215,489 families. The Commonwealth market alone offers 1.7 million people as customers.
Cesar Rodriguez, DA director for the Cordillera, said that the farmers
could penetrate these markets better through a marketing cooperative.
Right now, the Bad-ayan Buguias Development Multi-Purpose Cooperative and the Marketing Cooperative for Benguet Farmers have tried the markets.
Time will tell if these market opportunities would solve the farmers’ gripes over prices.