Review of rice tariff law pushed

by Karl R. Ocampo, Philippine Daily Inquirer, Jul 18, 2019

Industry stakeholders are appealing to President Duterte to order a review of the rice import liberalization law after palay prices reached its breakeven point, leaving local rice producers without any profit.

At the same time, rice prices in the market have remained “almost constant” despite the assurance of economic managers that these would go down by P7 a kilo.

Agriculture Secretary Emmanuel Piñol relayed these concerns on his Facebook page on Wednesday after he engaged in a dialogue with farmers, assuring them that their concerns would be submitted to the President through a formal memorandum.

The rice law, passed barely four months ago, has already resulted in the continuous decline in the buying price of palay. Farmers in some provinces reported that it had plummeted to as low as P12 a kilo or the same as the average cost of producing rice.

According to the Philippine Statistics Authority, the average farm-gate price as of June was P17.85 a kilo—the lowest in almost three years.

Piñol said stakeholders also decried the “massive profits enjoyed by rice importers and traders” who bought imported rice at low prices and yet sold them to retailers at jacked-up rates.

“The prevailing farm-gates prices showed a steep drop from an average of P20 a kilo of fresh palay earlier this year, which resulted in an estimated P114 billion in losses to Filipino rice farmers for the whole year,” he said.

“In contrast, the market prices of rice, expected to drop by P7 a kilo with the rice tariffication law, have remained almost constant with some areas reporting a drop of only P1 to P2 a kilo even with the deluge of imported rice,” he added.

Shipment entry records lifted from the Bureau of Customs showed that the landed cost of rice coming from Myanmar, Vietnam and Thailand were P18.22, P25.33 and P23.06 a kilo, respectively.

However, validation of market prices conducted by the Department of Agriculture’s regional offices showed that the staple was being sold between P32 and P70 a kilo nationwide.

“The drop in the price of rice in the market of P1 to P2 a kilo does not even come close to the financial sacrifices of rice farmers,” Pedro Lim, a farmer leader from the Caraga region, said.

“Palay prices are aground but rice prices in the market are still the same,” Aldrin Cardenas, a former overseas worker who now heads a farmer-cooperative, added.

While the policy ensures an annual subsidy of P10 billion to the rice industry to cushion it from the measure’s adverse effects, former professor at the University of the Philippines Los Baños Teodoro Mendoza said this would not be enough, noting that the amount was only 2.5 percent of the sector’s P400-billion contribution to the economy.

The fund, which was supposed to jump-start modernization programs for the industry this year, has yet to reach the farmers due to bureaucratic bottlenecks.