Philippines’ DA To Help Onion Farmers Obtain Loans Amid Difficulties With Price Drops

Philippines port
Trucks transporting containers with imported items are prepared to leave a port in Manila, Philippines May 25, 2016. (Photo: REUTERS/Erik De Castro/File Photo)

The Philippines' Department of Agriculture (DA) said it will step up financing assistance for onion farmers in the country amid challenges brought about by a decline in the commodity's prices.

According to local outlet Rappler, the DA said it will allocate a P300 million loan facility where onion farmers in Occidental Mindoro, Nueva Ecija, Tarlac, Iloilo, and other provinces, can obtain financial assistance.

Agriculture Secretary Emmanuel Pinol said on Thursday that the loans will be used by cooperatives' members to purchase onions at an average of P15 per kilo. The loan facility, on the other hand, can reach up to P150,000 per cooperative as part of the government's efforts in helping boost domestic supply.

"When the onion is kept in cold storage facilities, the cooperatives and the DA will monitor the price in the market and release the supply as soon as there is an upward trend," Pinol said. He added that the DA will pay for storage fees.

Aside from financing, it was announced on Wednesday that Occidental Mindoro will have four cold storages for onion produce in a number of provinces. The construction of these storage facilities will reportedly be added into next year's national budget proposal.

Last week, reports about an alleged onion cartel emerged in local media outlets. The reports stemmed from the shutdown of cold storage facilities by trading firms - a move that forced onion farmers to sell their produce at a significantly lower price.

According to The Philippine Star, the Philippine Competition Commission (PCC) will spearhead the alleged cartel activities in the onion industry that involve the refusal of trading companies to allow access for small onion farmers due to bigger opportunities offered by large-scale traders.

The PCC said it will investigate if competition concerns in the country are linked to alleged storage space restrictions or if there is an ongoing price manipulation by onion industry cartels. The Commission also said it will look into the possibility of natural consequences affecting the shocking drop in onion prices.

Pinol previously said onion imports will be temporarily suspended due to the ongoing investigations on the suspicious movements within the Philippines' onion industry. The Secretary said the move to stop imports until further notice will block the cartel from further basking in its unethical activities that put burdens on small-scale onion farmers.

Before harvest time, onions were priced at P30 but shortly after farmers harvested their produce, prices dropped to a P15-low, igniting talks about a potential conspiracy among trading firms and larger traders.

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