ON THE second week of July, this year, the Philippine Statistics Authority (PSA) reported that the price of palay is P17.87.
In some areas, the price dropped to as low as P12.00.
With a mild El Nino in 2018, the growing conditions for rice in the months of September-December was still generally favorable throughout the country. The second crop was harvested from mid-January and completed in July this year.
With the signing of the Rice Tariffication Law (Republic Act 11203) by President Rodrigo Duterte, the forecast for cereal imports in 2019/20 marketing year (July/June) was seen rising at a high level.
The rice tariffication law has lifted quantitative restrictions on rice importation and allowed private traders to import the commodity from abroad.
The law replaced the government’s quantitative restrictions on importation of the staple with a 35 percent tariff. Its implementation is intended in part to spur imports in order to quell domestic unrest caused by inflation.
Without quantitative restrictions, the USDA projected the country will be importing three million metric tons (MMT) of rice this year.
The agency noted sees higher imports of rice despite a significant increase in local output as domestic consumption remains to be in an upward trend. Production of milled-rice is seen rising by two percent to 12.2 million MT. Rice consumption is also projected to hit 14.45 million MT from 13.9 million MT.
The USDA said there is an improvement in area planted as rice areas are seen to reach 4.85 million hectares this year or one percent higher than a year ago.
Yield is also expected to improve to 3.99 MT per hectare per harvest from the earlier 3.96 MT.
While things are turning out slightly in favor of consumers, things have gone for the worse for the farmers.
Since the implementation of the Rice Tariffication Law (RTL) on March 5, the Department of Finance (DOF), citing preliminary data from the Bureau of Customs reported that the private sector has imported 1.43 MMT of rice.
The price of rice has been steadily decreasing since September last year and Agriculture Secretary Emmanuel Piñol warned that the Philippines would have a rice problem if it relied on imports to meet its requirements for the staple.
For one, relying on imports at this time could discourage our farmers from producing the staple in the country’s remaining rice farms.
As of this writing, we can assume that the majority of our farmers are not ready and empowered to take on the challenges of a liberalized global market.
What the previous regimes and administrations failed to resolve is left for the current administration to overcome including the country’s free trade agreements and commitments.
For instance, one primary objective of agrarian reform during Martial Law, later dispersed into the functions of the Land Bank, Cooperative Development Authority (CDA), Department of Agriculture (DA), Department of Agrarian Reform (DAR), Department of Trade and Industry (DTI), Department of Science and Technology, and local government units (LGUs) is to organize farmers into cooperatives so they can take charge of the production and marketing of their produce. Today, these functions remain in the hands of traders. They can manipulate prices at the expense of both farmers and consumers.
With the RTL in effect, farmers fear that the local market will be flooded with cheap commodities like rice from other countries.
This is bad because our farmers (the majority are smallholders) are not empowered to compete with the realities of a free trade regime. Their meager incomes are yet imperiled with reductions.
With the current rice stock we have in the country (harvest plus imports) one wonders how many tons are hoarded somewhere and what are its effects once it is downloaded because you cannot store rice too long due to pests, deterioration, and storage costs.
I wonder if our lawmakers like Senator Villar and the Makabayan Bloc, had this in mind when they proposed at the height of the limited supply of rice and high prices in the market, to impose price control on the commodity.
But the University of the Philippines Diliman Ph.D. candidate JC Punongbayan thinks that price control is unsound.
Punongbayan, as reported by Rappler, declared that “imposing a price ceiling on rice in a time of rice supply constraints is a politically attractive but patently unsound idea. By preventing rice supply from meeting rice demand, it is a surefire way to exacerbate rice shortages nationwide and worsen the plight of our people, especially the poor. It also betrays the proponents' disturbing lack of understanding of basic economic principles.”
Now the RTL, a policy crafted by our lawmakers with Senator Villar as the main author is not working.
The measure created the Rice Competitiveness Enhancement Fund (RCEF) or a special rice buffer fund, with an initial P10-billion annual fund, to ensure rice production competitiveness.
The RCEF program steering committee (PSC) is chaired by Secretary Piñol. The PSC includes the National Economic and Development Authority, Department of Finance, Land Bank of the Philippines, and Technical Education and Skills Development Authority as members.
In their meeting last month, Piñol told the RCEF committee members “that time is running out for the government to roll out the necessary interventions for farmers now reeling from the steep drop in the price of unhusked rice.”
“The situation could worsen if we don’t deliver our commitment. For now, there is so much unrest among farmers especially in Luzon so we cannot afford not to deliver [interventions],” according to Piñol.
Senator Villar has vowed to look into the disbursement of the P5 billion initially released by the DBM to the RCEF Program.
But noting the continued losses of rice farmers, Senator Francis Pangilinan asked the Senate Committee on Agriculture and Food chaired by Villar to conduct an inquiry on the impact of the law (Republic Act 11203) as a whole on rice farmers and the local rice industry.
Meanwhile, in his 4th SONA, the President again urged Congress to pass the National Land Use Act (NLUA), a request that he has made since his first Sona in 2016.
Senator Villar, whose committee failed to pass the measure in the past Congress, said that passage of the land use act will earn ire of local governments.If we do not have an NLUA how will the LGUs be regulated from converting precious rice lands into subdivisions?
Without rice lands could food security and rice self-sufficiency be ensured and sustained? Selfish interests could be making rice production, sustainability and self-sufficiency unsound?