“Modern agriculture has been accurately described as a way of turning oil into food. As the price of oil continues so will the price of food” – Jeremy Grantham
According to Gardebroek and Hernandez, in economics “increasing crude oil prices directly affect agricultural prices through higher input and transportation.” Agriculture is an energy-intensive sector and plays a big role on the demand-side of the energy equation.
REALITY BITES
Fuel or oil is a critical input, both directly and indirectly to agricultural production. Its price is a significant factor link to the prices of major agricultural products such as rice, corn, sugar and wheat. Globally, these are major agricultural products that, in the process of their production require an increasing amount for production.
The relationship of fuel to the increasing the prices of these major products is essential to food consumption because of their indispensability as staples of humanity. Indispensable because they are the basic needs to address hunger. These products are also consumed by major livestock worldwide equally in high demand due to their consumption-importance.
Their “indispensability” is consumption-based demand capitalized by the profit oriented corporate world. Worse, its environmental impact is of bigger risk since 70% of the global consumption of fuel is coal-based and poses health hazards as well. A harsh reality we all need to withstand.
SUBSTITUTES AND ALTERNATIVES
According to experts, it is difficult to shift to substitutes and alternatives for fuel which is directly related to agriculture. The impacts of COVID19 pandemic and the Ukraine-Russian war created a “food shock” around the world where demands increased where supply hardly copes up. The harder part is, the capacity of the majority to absorb the brunt of the rising prices of food and fuel or the “oil-food”.
Bio-fuel such as ethanol and biodiesel cannot compensate the amount of production of coal-based fuel. In 2022, coal-based energy production was at 8 billion tons while bio-fuels only reached a daily production of 1,914 thousand barrels of oil per day. A ton of oil is roughly 7.5 barrels. Prices of both products keep soaring putting the bio-fuel at a disadvantaged platform despite demands for both continue to increase. International Energy Agency predicts that from 2010-2026, the demand for energy will double.
According to USDA, in 2021 the Philippines’ electricity consumption of the agricultural sector in the amounted to approximately 413 thousand tons of oil equivalent. This consumption accounted for the largest share of the energy consumption of agricultural sector that year.
AFFORDABILITY AS ‘SUBSTITUTE’
The cumulative increases of fuel ranges from 12-15 pesos from the 1st week of July to the 1st week of August. There is no turning back as far as the prices of oil is concerned. Given its importance and increasing demand the only option is our affordability in order to meet the day’s end.
For Filipinos, our affordability to buy rice is reduce-buying. With the price almost doubled – instead of buying 2 kilos we now buy only 1 kilo. It can be said that this affects productivity whereby our energy to produce more outputs suffers. For working Filipinos make their level of affordability as “substitute” to the unstoppable increasing prices of basic commodities. Moreover, it is not only themselves they survive but each member of the family who depends on them.
For Filipinos there can be no substitute for rice and those who do not eat rice – largely in the rural and far-flung areas are those who really cannot afford to buy.
INEVITABE INCREASING DEMAND
Directly proportional are the increasing demand of major agricultural products and the demand for fuel as the major element spurring agricultural production. While agriculture is the smallest of the four major sectors that consume fuel with manufacturing, mining, construction being the other 3 but, its exponential demand is inevitable.
Labeled as a developing country, the Philippines’ system of agricultural production lags behind. More than half of Asia and Africa still depend on their agriculture for economic recovery post the COVID-19 pandemic with the Philippines belonging to the former it is quite un-imaginable how we can recover and, more so, how to develop and modernize our agriculture by undertaking alternative measures against the threat of “oil-food”.
OPTIONS LEFT
There are 2 options left – integrate biofuel technology in agriculture where the country is now gaining ground especially in Negros where production is increasing as sugarcane by-product. Or, simply pursue unabatedly importation. We may have the same guess.*
