The Department of Agriculture (DA) on Tuesday said it is now seeking available funds, including a request from the Office of the President (OP), to expand its fertilizer subsidy program to help farmers cope with the rising costs of the vital farm input.
Agriculture Undersecretary Ariel T. Cayanan said DA is now looking at possible funding sources to bankroll its expanded fertilizer subsidy program since its current budget will not be able to sustain the current subsidy they are giving to rice farmers.
The DA’s fertilizer subsidy program provides P2,000 for farmers planting inbred rice varieties; those planting hybrid rice get P3,000.
But since the prices of fertilizer have gone up to more than P1,700 per bag, Cayanan said, the current fertilizer subsidy will not be enough to provide two to three bags of fertilizer to rice farmers. The amount of subsidy that the DA is currently providing to rice farmers is pegged at a P1,000 per fertilizer bag price.
“There is already a directive from the Secretary [William Dar]: he wants to source more funding to increase the subsidy we are giving. There is already a proposal and the Secretary wants us to make formal communication on how to source different funds and even to the point of asking through the Office of the President in order to increase our fertilizer subsidy,” Cayanan said at a virtual news briefing on Tuesday.
Only rice farmers who received free rice seeds both inbred and hybrids from the DA are eligible under the department’s fertilizer subsidy program. For 2022, the department is eyeing to cover 4 million hectares for its fertilizer subsidy program.
“Because of the higher price of fertilizers, the subsidy we are giving to farmers may be cut in half. We prefer thinner butter to the pan but we want to spread it to all areas and ask for more subsidies to make it thicker,” he added.
Cayanan did not provide any estimates on how much budget they are seeking to ask from either the national coffer or the OP.
Last month, the DA disclosed that it is exploring various measures to help farmers cope with the rising prices of fertilizer, including the wider subsidy program as an immediate relief.
Topping the list of measures is assessing the probability of providing additional subsidies to farmers to aid them in their fertilizer expenses. However, Agriculture Undersecretary-designate Leocadio S. Sebastian pointed out that another round and expansion of the fertilizer subsidy program “requires substantial funding.”
He added, “We are scrutinizing this and studying how we can implement this.” The DA earlier rolled out a fertilizer subsidy program for rice farmers worth about P2.78 billion.
The World Bank (WB) recently projected the average price of urea this year would be $380 per metric ton (MT), nearly 66 percent higher than its average price of $229 per MT last year.
The average price of Diammonium phosphate (DAP) fertilizer this year could be $590 per MT compared to its average quotation of $312 per MT last year, according to WB projections.
The retail price of fertilizers in the Philippines, as of mid-October, rose by as much as P100 per bag compared to their price levels in mid-September, based on latest Fertilizer and Pesticides Authority (FPA) data.
For example, the average price of DAP is now at P1,965.72 per 50-kilogram bag from P1,895.97; while the average price of urea (prilled) is now at P1,630.95 per bag from P1.523.14 previously.
The price of urea (granular) is now P1,580.22 per bag from last month’s P1,494.8, while complete fertilizer is now priced at P1,404.23 per bag from P1,353.43.