President Rodrigo Duterte has issued three directives to protect the interests of rice farmers even as his administration has vowed to continue liberalizing imports of the grain.
Duterte ordered the National Food Authority (NFA) to increase the country’s emergency buffer stock from 15 to 30 days by buying more palay from farmers.
He also directed the NFA will accelerate the turnover of its inventory by buying more palay and selling more regular milled rice, at an average of 20,000 50-kg bags or more of rice per day.
At the same time, Duterte extended to two years from one year the unconditional cash transfer for small farmers affected by low palay prices, with a budget of P3 billion per year.
This will benefit 600,000 farmers.
Finally, the President directed the DA through the Bureau of Plant and Industry, to strictly implement the issuance of sanitary and phytosanitary import clearance (SPSIC).
For instance, the agency will conduct pre-inspection at the point of origin of imported rice stock to ensure rice quality and safety for consumers and at the same time protect the spread of crop pests and diseases.
Agriculture Secretary William D. Dar said Duterte met with him, Executive Secretary Salvador Medialdea and Finance Secretary Carlos G. Dominguez Wednesday night during which the President made it very clear that he strongly supports Filipino farmers who are confronted with low palay prices this harvest season as a result of the influx of imported rice.
“We discussed and the guidelines….The President is really looking out for the farmers and this is the directive,” Dar said.
According to a statement from the Department of Agriculture, the President said the country’s rice industry will continue to thrive with the implementation of the programs under the Rice Competitiveness Enhancement Fund, which is aimed at making Filipino farmers more efficient so they can compete with their counterparts in Southeast Asia.
Duterte earlier ordered Dar to suspend rice importation, as he asked Congress to allocate funds to buy palay or unhusked rice from local farmers.
Dutert said he is suspending its importation since it is now harvest time.
“If you don’t want problems, buy all the produce of local farmers. If their farm gate [prices] are costly, no problem,” the President said in a press conference, addressing lawmakers.
In February, Duterte signed the Rice Tariffication Law allowing private firms to import rice if they secure permits from the Bureau of Plant Industry.
The law has formed a P10-billion Rice Competitiveness Enhancement Fund to protect the livelihood of local farmers, but some groups has criticized the measure for bringing in cheap imported rice, which forced many Filipino tillers to sell their produce at lower prices.
Finance Secretary Carlos Dominguez III, meanwhile, said the government is on guard against the hoarding of rice by unscrupulous businessmen who seek to manipulate the price of the staple.
At the sidelines of a media tour in sports facilities in New Clark City organized by the Bases Conversion and Development Authority, Dominguez said the Department of Finance was currently consulting with the Philippine Competition Commission to find out if indeed there were cases of rice hoarding.
“Normally, the retail price follows the cost of the middle man…. But that is not happening right now. It is not following the trend in the drop in retail price,” Dominguez said.
“Somebody must be intervening in the market,” he said.
He said the Department of Trade and Industry should help in the monitoring of rice prices.
Government data earlier showed that the provinces with the biggest drop in dry palay price per kilo relative to the normal period are Bulacan (P5.63), Compostela Valley (P5.20), Pampanga (P4.60), Ilocos Norte (P4.38), and Agusan del Norte (P4.37).
The Department of Finance said it was closely monitoring potential distortions in the market, particularly the price gap between farm gate and retail prices. The gap between the per kilo retail price of regular milled rice and farmgate price of dry palay is widest in the provinces of Iloilo (P29.75), Zamboanga del Norte (P28.50), Negros Occidental (P28.01), Kalinga (P25.33), and Bulacan (P25.25). The average gap is around P22, as average retail price is P37.51 per kilo compared to dry palay farm gate average price of P15.71 per kilo.
Finance Undersecretary Karl Kendrick Chua, who heads the DOF’s Strategy, Economics and Results Group, said the wide discrepancy between the farm gate price and the retail price of regular milled rice in some regions starting in October indicate a problem in the “middle supply chain,” referring to traders who have kept their imported rice stocks in warehouses to drive retail prices up despite abundant supply.
“The palay price is still falling but the retail price is not falling as fast so there’s a growing disconnect,” Chua said during a recent DOF Executive Committee meeting, citing data from the PSA.
Duterte earlier apologized to local rice farmers over low prices of the grain but insisted that the Philippines needed to import rice.
Duterte explained that he would not repeal the rice tariffication law since doing so might result in a “food crisis.”
On Nov. 13 during the Rice Conference held in Makati City, Dominguez said the country was now reaping the benefits of the rice tariffication law.
“We are no longer vulnerable to price spikes in rice,” he said, citing the peak of inflation rate in 2018 that reached 6.7 percent, driven mainly by high oil and rice prices.
He said latest data showed that the law brought down the price of rice by about P9 per kilo. Also, inflation further eased to a 42-month low of 0.8 percent in October 2019 from 0.9 percent a month ago, bringing the year-to-date average to 2.6 percent, below the midpoint of the target range of 2-4 percent for this year earlier set by the government.
Aside from those positive developments, Dominguez said the law also eased pressures on employers to raise the wages of their employees.