In late 2021, then presidential candidate Ferdinand Marcos Jr. promised to bring down the price of rice, our staple food, to P20 per kilo, if he got elected.
At the time, rice prices were way above this, so he must have won over more supporters because of his campaign promise.
But more than a year after assuming office, his administration could only manage to impose a temporary price ceiling of P41 for regular-milled rice and P46 for the well-milled variety.
Today, rice prices are dictated by market forces, and nowhere near the P20 per kilo the President pledged in 2021.
But wait, there’s change on the horizon, with the administration likely to deliver on its promise to the people, particularly those living on the margins of society, if it implements an out-of-the-box program.
We’re talking about a proposal in Congress to reach the goal of the elusive P20/kilo rice.
It comes from Rep. LRay Villafuerte, current head of the National Unity Party, and it’s touted to be a doable solution to our rice woes by next year.
What the lawmaker wants to do is to make small farmers in the country’s top 10 palay-producing provinces harvest at the end of the next planting season in 2024 a combined 5 million metric tons or 5 billion kg of our staple food.
The projected yield of 5 billion kilos at the end of one planting season would allow the administration to sell 1.5 billion kilos of rice at P20 a kilo to poor and low-income families, and another 1.5 billion kilos at P30 to the rest of the consumers.
The government now spends about P40 billion in annual subsidies for the rice subsector.
The lawmaker has proposed to newly designated Agriculture Secretary Francis Tiu Laurel to consider using this huge amount to subsidize small farmers tilling an initial total land area of one million hectares in the Top 10 palay producers in the country.
Villafuerte proposes a P40-billion subsidy/contract-growing solution to the perennial supply and price woes besetting the rice industry by extending financial assistance of P40,000 per hectare to every target farmer-beneficiary in the biggest palay producers in the country.
The lawmaker is convinced market rates of P20 and P30 a kilo are actually doable starting next year, if we were to adopt now a novel palay productivity program involving the grant of a pre-planting subsidy of P40,000 per hectare to target farmer-beneficiaries tilling a total of a million hectares in our 10 biggest palay-producing provinces, but on condition these farmers sell their produce to the government at P9 a kilo.
“With a projected total yield of 5 billion kg of palay from the one million hectares, based on an average output of 5 MT or 5,000 kg per hectare, this novel subsidy-cum-contract-growing proposal will translate to 3 billion kg of rice, at the palay-to-rice, after-milling conversion rate of 60 percent,” the Bicol solon said.
Buying the farmers’ produce after already giving them P40,000 each before the start of the planting season would encourage the target beneficiaries to produce more from their respective farms as they will be paid P9 for every kilo of palay they are able to produce.
The government will earn P30 billion from selling 1.5 billion kilos of rice at P20 and P45 billion more from selling the other 1.5 billion kg at the higher P30 kilo, or a total P75 billion.
“Thus, at the end of this undertaking, the government will have spent just P10 billion in subsidies for the rice productivity program—in lieu of the current P40 billion—after collecting P75 billion from the total project cost as against the P85 billion set aside for the farmers’ subsidy and subsequent rice sale,” said Villafuerte.
Funding for this rice productivity program, the lawmaker said, can be sourced from the annual General Appropriations Act, a Congress-approved supplemental fund, or from the collections from rice import tariffs.
“This is an excellent solution because we will be providing needed production assistance to our palay growers that will stop them from seeking pre-planting loans from usurers or unscrupulous traders and then selling their produce to them at dirt cheap prices, while at the same time boosting our harvests and enabling rice consumers to buy the staple in retail markets at only P20 to P30 per kilo,” he explained.
Besides, this proposed scheme is in sync with the administration’s initiatives to provide financial assistance to rice farmers, boost their productivity, reduce our dependence on imports, and provide consumers, especially the poor and other vulnerable groups, with greater access to cheaper rice.
It’s worth trying out, from where we sit.