Government approved importing 60,000 metric tons of galunggong in fourth quarter this year. Perhaps more by first quarter and second quarter next year. The question, why?
We have some 220 million hectares of seas and about 350,000 hectares of freshwater bodies. We have among the world’s highest diversity of fisheries. Why buy fish from elsewhere?
The reason, say government economists, is supply and demand. Our national need (demand) is rising higher than our nationwide harvests (supply). Population growth, our failure to fish sustainably and protect our fisheries from foreign poachers, and low investments on aquaculture, are together widening the gap between our production and consumption. Our annual population growth is about 2.6 percent and we consume about 40 kg of fisheries per year per capita. But production has been declining (by 2 percent in volume in 2016-2018) and pork, our other major protein source, was hit hard by the Asian Swine Flu (ASF). These increased demand pressures on our fisheries resulting to a surge in their prices.
Fisheries prices could ease once pork production recovers to pre-ASF levels, harvest controls on capture fishing (like seasonal and area closures) allow stocks to recover from declines, and investments on aquaculture increase. Meanwhile, government would permit importations to add to our domestic supply, close the gap between supply and demand, and so lower fisheries prices and weaken their effects on general inflation (always a sensitive political matter).
But is this government view of importation cogent? Probably not entirely as it’s believed.
First, the ecology of fisheries and the dynamics of the domestic fisheries industry are more complex than those of land-based commodity crops (the usual template for agricultural commodity importation). The inflationary pressures of the latter are differentiable by commodities (like rice or pork). But the inflationary impact of fisheries prices is collective and not specific to species. Importing particular species like galunggong may not produce the same results on inflation as importing, say, rice because fisheries have higher production and consumption substitutionability than land-based crops. Their elasticities to supply and demand differ from those of land-based crops so that importing fisheries may not tame general inflation (if this is in fact the intent) as is importing rice or pork. It could ease local prices where the bulk of imports are sold and the volume sold is sufficient to affect local prices.
Second, our fisheries sector is highly stratified. The benefits and costs of importation differ across large and smaller commercial producers; commercial and municipal fishers; capture and culture producers; and between producers and consumers across different income groups. Importation would likely unevenly affect different producers as it would different consumers. It’d be hard to pin down and control how benefits and costs of importation would affect different players in the fisheries supply and value chains to avoid serious inequities in the production and consumption sides of the sector.
If taming fisheries-induced inflation were the goal, importation may not be potent as expected as against actually improving and sustaining our own fisheries resources. Importation may be a quick way out of supply shortfalls in high demand-low substitution areas, but it’s not a long term measure in taming prices as keeping our own fisheries resources hale and well at pace with our rising demand.
Should we import? My take is, realistically, yes. That is, while we yet recover the health of our domestic stocks after years of decline. But it’s best done if (1) limited and aimed at supplementing harvest controls to ease demand pressures on stocks and aid in their recovery, (2) temporary to only during seasonal closures, (3) targeted to areas where demand and consumption is high and substitution is low, (4) adversely affected fishers and fisheries farmers are given other income sources to secure their well-being, and (5) complemented with the immediate passage of the long-lingering National Land Use Code to incentivize investments on aquaculture.
Short of these, importation may end up merely palliative inflation-wise. It may lower fisheries prices and generate good political optics in high demand areas like big cities where imports are likely to be poured, but it would probably have low impact over-all on reducing long-term and nationwide demand pressures on domestic fisheries prices.
Which leads me to ask: if fisheries prices had in fact spiked, was it really because of supply shortfalls of galunggong that importing it would ease prices? Is it not possible that the spike was because of deep-seated structural and market distortions in our domestic fisheries sector?
There’s probably a need to look at these in more detail. – NWI
