‘Mismanagement’ of imports blamed for excess rice supply

By Madelaine B. Miraflor, Manila Bulletin, Sep 6, 2019

The Philippines now has too much rice — more than what the country needs — as the government “failed to manage” rice importation since the Rice Tariffication Law was passed.

Federation of Free Farmers (FFF) National Manager Raul Montemayor said there is now an excess supply of 7 percent in the market and “this glut will worsen if more imports come in and coincide with the main season harvest.”

Data from the Bureau of Customs (BoC) showed that about 2.4 million metric tons (MT) of imported rice have arrived in the country as of July. This is around 17 percent of the country’s total requirement for the year.

“We actually need to import only 10 percent of our needs because we can produce the 90 percent. So, there is that excess,” Montemayor said.

The group claimed that the surge in rice imports is now killing the local rice industry, with farmers selling their rice at a loss. After going down to as low as P7 per kilo (/kg) to P8/kg, palay prices are expected to further go down in the next weeks as the main harvest season peaks in October.

This even if the cost of rice production in the country remains high, with farmers needing to spend P12 in order to produce a kilo of palay due to high cost of fuel, lack of machinery, and lack of government support.

“Because of too much supply of imported rice in the market, local traders cannot unload their stocks at a profit. And they have to adjust their buying price from farmers so that they can compete with the cheaper imports. This explains why palay prices are falling down,” Montemayor said.

FFF then told the government to stop relying on palliative measures that are “either too expensive or ineffective” to address the steep drop in palay prices and must start looking at the “root cause” of the problem, which is mainly the mismanagement of rice imports.

The group has suggested that the government immediately impose special safeguard duties on rice imports, and avail of other trade remedies such as anti-dumping and general safeguards.

These measures will allow the government to temporarily impose additional duties on rice imports, thus making them more expensive. The FFF has also supported the more stringent application of pest and disease and food safety controls on rice imports.

“Government must focus on the supply side, because that is where the problem is coming from. It must find a way to manage the inflow of imports until the supply glut disappears and farmers and traders are able to unload their stocks. Our studies show that even with these measures, rice prices need not go up because imported rice will still be much cheaper even with the additional tariffs,” said Montemayor.

He also argued that while increasing government buying of farmers’ palay will help, it will never be enough for as long as the cheap imports continue to come in.

On Thursday, Senator Francis Pangilinan has filed a joint resolution to amend the Rice Tariffication Law, which allowed the unlimited entry of imported rice, as well as to order the release of P13-billion immediate cash assistance to rice farmers.

“Our rice farmers and the rice industry face an emergency situation. And we have the money that can be given to our suffering farmers,” said the former secretary on food security