Since oil prices spiked because of the war between the United States and Iran, Filipino vegetable farmer Bic Pagkaliwangan has watched his already small profits get cut in half.Diesel for farm machinery now costs him 25% more to hire. The price of trucking his produce to market has also jumped sharply. For tomatoes, he now earns just 25 Philippine pesos per kilogram — about 40 cents for every 2.2 pounds. For okra, it’s 30 pesos. If fuel prices keep rising, he says it may no longer make sense to keep farming commercially.
Still, for now, he’s holding on. “We’ll keep going and take the risk,” Pagkaliwangan said quietly. His story is being repeated across the developing world. The closure of the Strait of Hormuz — not just for oil but also for fertilizer shipments — is driving up the cost of growing food, especially in poorer countries where farmers have little room to absorb higher expenses. Experts warn that prolonged high costs could lead to lower production, higher food prices, and even shortages in the months ahead, said a WSJ report.
In the small coastal town of Lian, about three hours south of Manila, the impact is already visible. Farmers are thinking twice about planting new crops. Some are harvesting less or leaving vegetables in the field because it costs more to bring them to market than they can sell them for.
The Philippines is particularly vulnerable. Almost all of its fuel comes from the Middle East, either directly or through other Asian countries. By mid-April, diesel in Manila had more than doubled in price compared to two months earlier. The government has declared a state of emergency and introduced limited relief measures, such as removing tolls for trucks carrying fresh produce and offering fuel subsidies to farmers and fishermen. It has also started looking for alternative oil suppliers, including Russia.But for many farmers and fishermen, the help feels too little and too late.
In a nearby fishing community, about one-third of the members of a local fishing association have already left the industry to look for work in construction or other jobs. Fishermen say they can no longer afford to travel to better fishing grounds farther offshore. On some trips, the catch is barely enough to cover the cost of fuel. Rice farmers are also feeling the squeeze. Fertilizer prices have jumped as much as 40% in recent months. Labor costs are rising too, as workers demand higher wages to keep up with their own increasing expenses. Some farmers have switched to an “on-call” labor system instead of keeping full-time workers.
Rice mill owner Edgar Sales says the cost of milling rice has gone up, and the price of replacing parts for his equipment has increased by 20%. He worries that when the wet season arrives, the cost of drying rice could nearly double because of high diesel prices.“If Iran and the U.S. come to an agreement, maybe we can go back to the way things were before,” he said with a sigh.
The ripple effects are being felt beyond the Philippines. Vietnamese rice export prices have risen due to higher production costs. In Thailand, one of the world’s top seafood exporters, many fishing boats have been forced to stay docked because of expensive fuel.Food security experts warn that developing countries have far less ability to absorb these shocks than wealthier nations. With a large portion of their populations already living close to the poverty line, even modest increases in food prices can push millions back into hardship.
For now, markets in the Philippines are still well stocked. But if farmers start cutting back on planting or using less fertilizer to save money, the situation could worsen later this year. As one farmer in Lian put it simply: “If we don’t plant, we don’t eat.”The war in Iran, which began as a military conflict, is steadily turning into an economic crisis that is quietly threatening the food supply of some of the world’s poorest people.
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