DA rolls out Kadiwa stores, considers imports to bring onion prices down

The Philippines currently has the most expensive onion prices in the world, according to a report by an independent price database. Red onions, a staple in Filipino cuisine, are sold for PHP 280 to 300 per kilo (USD 6.63 per kilo) – almost five times more expensive than the average global price of USD 1.5 per kilo. Among other commodities, the Philippines also has the most expensive carrots, sugar, and orange juice in Southeast Asia, as well as the most expensive bottled water in Asia.

As global price hikes, supply issues, and agricultural losses due to climate-related disasters continue to worsen inflation rates domestically, the Department of Agriculture (DA) said they are still trying to figure out why red onion prices refuse to go down. For reference, red onions were worth PHP 180 per kilo (approximately USD 2.5 dollars) one year ago. 

The Bureau of Plant Industry (BPI) believed it was an issue of insufficient supply. As early as July, major onion-producing regions in the country reported a zero-percent sufficiency rate, and agriculture officials stated then that the supply of onions may become scarce until November. It was mentioned that an onion harvest was expected by the second week of December, which could stifle the increase in prices. 

Still, the DA is currently considering the importation of red and white onions to help bring prices down — a move criticized by presidential sibling and senator Imee Marcos, who said imports may displace local production and become an avenue for collusion among traders and importers. The BPI maintained support for importation, however, noting that the anticipated red onion harvest will still not be enough to meet demand. 

The issue could also go beyond a shortage of supply. Reportedly, allocated land for onion production in the country has been on the decline since 2019, despite the DA laying down the goal and framework to achieve onion self-sufficiency by 2025. Producers have also expressed difficulties due to a lack of government assistance and being short-changed by traders at the farm gate. 

Economists and industry players expressed different ideas on how the government should address rising prices for agricultural commodities. Bangko Sentral ng Pilipinas (BSP) Monetary Board member V. Bruce J. Tolentino mentioned how the country should open up trade and focus on funding “productivity-enhancing measures,” instead of price support, which he said was unsustainable. Philippine Chamber of Commerce and Industry (PCCI) director William S. Co said young people should be encouraged to go into agriculture in efforts to revitalize the countryside, and that the high costs of production should be addressed. 

Vitarich Corporation’s Chief Executive Officer Ricardo Manuel Sarmiento added that the government should align with the private sector’s initiatives and allow them to manage imports as well. He remained optimistic with the attention given to the sector recently, now that President Ferdinand Marcos, Jr. himself sits as agriculture secretary. 

For their part, House Speaker Martin Romualdez said that lawmakers are currently focused on measures to stimulate domestic demand and increase the competitiveness of domestic production. The DA has also recently recommissioned its Kadiwa stores, which source fresh produce and other goods directly from farmers to sell them in mostly urban areas, to support both producers and consumers. There are currently 14 Kadiwa stores nationwide, with an additional 28 slated to be opened in the coming days. The Kadiwa stores are too few to impact the vast majority of Filipinos, but they do improve market access for a fraction of producers, and provide the government a means to try and show it is doing something to combat prices in a way that fits nicely into public relations campaigns. Policy interventions designed to actually help increase agricultural production on the other hand, including the priority National Land Use Act, remain in discussion and are being debated by the political system.