Farmers dispute government claims on huge drop in rice prices

by Louise Maureen Simeon (The Philippine Star), 28 Feb 2020

MANILA, Philippines — Local farmers refuted the government’s claim that the rice tariffication law was the reason behind the significant drop in rice prices.

The Federation of Free Farmers said around 70 percent of the drop in both regular milled and well milled rice occurred between September 2018 and March 2019, or before the law took effect.

This after the Department of Agriculture and Department of Finance claimed that rice prices dropped significantly by P9 per kilo and attributed this to the liberalization of rice imports following the passage of the RTL.

Data from the Philippine Statistics Authority partially validated these claims as prices for regular-milled rice declined from their peak of P45.57 per kilogram in September 2018 to P36.37 by December 2019. Prices for well-milled rice fell by P7.55 per kilo or 15 percent during the same period.

However, of the P9.20 drop in prices, P6.54 occurred during the eight-month period prior to the enactment of the law, and prices declined further by only P2.66 per kilo from March to December 2019 when RTL became operational.

“The claim that the RTL was responsible for the large drop in rice prices is therefore misleading. Official data shows that the bulk of the price decline actually happened before the law took effect. Prices dropped between September 2018 and March 2019 because the government authorized the importation of large volumes by the NFA and the private sector in response to the 2018 rice crisis,” FFF national manager Raul Montemayor said.

“This actually shows that the government could have prevented the rice crisis in 2018 if they acted sooner, even though the rice QRs (quantitative restrictions) were still in place. They did not have to wait for the RTL to be enacted into law. And it is intellectually dishonest for them to now claim that the drop in rice prices was primarily due to the RTL,” Montemayor said.

Data also showed that while rice prices declined in 2019, they remained higher than 2016 and 2017 price levels even after the RTL took effect.

For example, rice prices averaged P37.50 per kilo during the first ten months of RTL implementation from March to December 2019, this was higher than the 2016 average of P36.67 and 2017 level of P37.09 per kilo.

“Official data actually shows that the RTL has not delivered the promised benefits to consumers. RTL proponents were arguing that QRs on rice imports had resulted in rice prices which were double or even triple what consumers in Thailand and Vietnam were paying for rice. Others claimed that rice prices would become cheaper than P27 NFA rice if imports are allowed to freely come in,” he said.

“All these claims have not materialized, and official government data shows that consumers were in fact better off in 2016 and 2017 when the QRs were still in place,” Montemayor said.

The FFF reiterated its call for a thorough review of the law and its early amendment as deemed necessary. It also asked the government to urgently review and upgrade its interventions to help farmers cope with the fall in palay prices.

“It appears that some government officials are exaggerating the supposed benefits of the RTL to make it appear that rice liberalization is working smoothly and that there is therefore no need to amend the law,” Montemayor said.

The law removed the quantitative restrictions and most government controls on rice imports and effectively made the Philippines the largest importer in the world with as much as 2.9 million metric tons of imported rice in 2019.