Gov’t launches onion purchase program to stabilize prices

AGRICULTURE Secretary Francisco P. Tiu Laurel Jr. has directed the state-run Food Terminals Inc. (FTI) to commence onion purchases this week.

This proactive measure aims to stabilize farmgate prices as the harvest season approaches its peak, preventing a potential collapse.

A team has already been deployed to Nueva Ecija, the Philippines’ onion capital, to secure cold storage capacity. “They’ve secured space for 50,000 28-kilo bags, and we can expand that if needed,” Tiu Laurel stated, emphasizing the preemptive nature of this intervention against the typical harvest-time price slump.

Beyond Nueva Ecija, FTI is exploring opportunities in other onion-producing provinces such as Occidental Mindoro, Pangasinan, and Cagayan Valley. This broader approach seeks to support farmgate prices and ensure fair practices among traders. Tiu Laurel also mentioned the agency’s ongoing efforts to build cold storage facilities, which will extend the shelf life of vegetables and contribute to year-round price and supply stability.

This intervention aligns with President Ferdinand Marcos Jr.’s directive to maintain fair farmgate prices and ensure the profitability of farming. According to Tiu Laurel, the message from Malacañang is clear: price stability is a policy priority, and farmer retention is the ultimate goal.

Nueva Ecija accounts for over half of the nation’s onion production, with Bongabon alone contributing approximately 15 percent of the country’s total output. This makes the province a critical hub for both supply and potential price volatility during peak harvest periods.

FTI President Joseph Lo personally assessed market conditions in Nueva Ecija, reporting farmgate prices as high as P45 per kilo. This rebound follows assurances from the Department of Agriculture that imported red and white onion stocks are limited and expected to be largely depleted by the peak of harvest.

“Our goal is to buy at prices that are fair to farmers, at levels that are enough to make onion farming profitable and sustain their planting intentions,” Lo explained.

The timing of this intervention is critical. Historically, the combination of heavy imports and peak local harvests has led to significant drops in farmgate prices, discouraging growers and causing production shortfalls in subsequent months. These shortfalls, in turn, have necessitated further imports, creating a disruptive boom-and-bust cycle.

By absorbing supply and expanding cold storage capacity, FTI aims to act as a buffer buyer, mitigating gluts and stabilizing price fluctuations. This strategy mirrors classic market stabilization tactics: purchasing when supply is abundant and releasing stocks when prices surge.

Whether 50,000 bags (approximately 1,400 metric tons) will suffice to effectively stabilize prices remains to be seen. However, the government’s message is clear: it is committed to defending farmgate levels and intervening proactively.

National consumption of onions is estimated at around 550 metric tons per day.