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The Irony of Getting Mad at Agricultural Imports Then Complaining About Inflation of Agricultural Goods


I really must laugh at the stupidity of "thought leader" pages or the comments on Facebook. A good example is the one above where Rosendo So says that onion importation could've prevented the price surge of onions. However, just reading the comments (and there's so plenty I wouldn't bother replying to them all) keep demanding protectionism for local farmers. The illogical stupidity of the comments proves one thing--there's still a significant surge of economic illiteracy in the Philippines. What do you expect from people who demand stuff like higher wages while lowering the prices of goods? Simple cost accounting dictates that wages are part of the production process. If you start raising up prices then you can expect the prices of goods to increase as well. They even don't bother to analyze the supply chain along with operational costs as well.

I don't need a doctorate in economics to get it. Okay, I'll confess that I had a graduate degree from the School of Business and Economics (SBE) from the University of San Carlos (USC). I had three units of economics during my Associate in Computer Science (ACS) days. I had a total of six units of economics during my Bachelor of Science in Business Administration (BSBA) days. I had three more units during my Masters in Business Administration (MBA) days. Still, it's taught in basic economics that the law of supply and demand dictates it. If supply is low and demand is high then prices must go up. If supply is high and demand is low then prices must go low. It's all about regulating the free market. Also, if businessmen sell low during the high demand and low supply scenario--that would mean they'll have t close down sooner or later.

It's true that the Philippines is an agricultural country. However, if a country must export then it must also import. There are planting seasons and harvesting seasons. If it's not harvesting season then you can't force local Filipino farmers to speed up the process. Much care must be done by Filipino farmers to make sure their plants grow well. The obvious solution is to import. Somebody can argue Singapore must rely on imports because of its lack of natural resources. However, times of scarcity will hit. One country may have an excess while another has a scarcity. That's why it's important to have imports during scarcity and exports during excess.

I was reminded of times of drought. Back then, I had no idea why rice merchants had to sell imported food. Wouldn't that be detrimental to the local farmers? However, if rice merchants didn't buy imported rice (such as from Thailand and Vietnam) then they'd be focused on selling local rice at a very high price. Nobody would want to buy expensive local rice. Instead, people would opt to eat cheaper imported rice. The same goes for onions and other spices. If local Filipino merchants imported spices then they'd have something to sell. If there was an import of agricultural products then Filipino businesses can benefit. They will have more affordable items to sell or make their products with. A dessert maker could still produce rice cakes even if the rice was from Thailand or Vietnam. A bakery can still benefit from imported flour to make Filipino bread. 

An article I wrote was about if Filipino businessmen used imported equipment and materials (read here). It's because when I look at many booming local Filipino businesses--they're obviously using imported equipment. Don't tell me that Jollibee prospered without using imported stuff? Don't tell me local groceries can go on without selling imported stuff? So what if Filipinos actually used imported onions and garlic to cook a Filipino dish? Does that make the dish less Filipino? It wouldn't and I could care less if the stove wasn't made in the Philippines. What's important is that the Filipino dish was made with quality ingredients and equipment. There will be a mixture of local and imported. One could be cooking delicious pochero (Filipino beef stew) with beef imported from New Zealand, tomatoes from local farmers, ginger from Bicol, onions from Vietnam, and on a stove made in Japan. It's still delicious pochero nonetheless! It's still a Filipino dish and the imported ingredients didn't make it "less Filipino". 

The issue with imports is basically this. Filipino farmers need time to raise and grow their crops during planting season. Importing agricultural products isn't a threat to local industries. It's more about introducing competition plus balancing supply and demand. If there's a scarcity of local agricultural goods then importing is necessary. If there's an excess then exporting is the solution. The Philippines needs to stop babying its industries. Instead, let them grow with competition. 

As Deng Xiaoping would say, "It's not the issue of the cat being black or white. What I care about is the cat catches mice." Mao Zedong restricted a lot of imports and tried to create a protectionst utopia. I bet nobody abroad bought his inferior rice. The self-industrialization policy failed. As the late great Lee Kuan Yew said, "Let's stop trying to do everything ourselves." This is why I support removal of unnecessary tariffs. The only taxes I believe that foreign investors need to pay are income taxes. Let's stop crying, "Filipino First!" all the while it's done on American-made social media like Facebook or Twitter. 

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