By Madelaine B. Miraflor
As the government further delayed its decision on the implementation of safeguard measures versus rice imports, the price of palay (unhusked rice) continued to go down, falling to its lowest level in eight years.
Latest data from Philippine Statistics Authority (PSA) showed that as of the fourth week of September, the average farmgate price of palay dropped further to P15.82 per kilogram (/kg), 29.3 percent lower from its price level of P22.36/kg a year ago.
Week-on-week, it slightly went down by 0.9 percent from P15.96/kg.
During the period, palay prices even dipped to as low as P10/kg in Central Luzon, particularly in Bulacan. In some areas in MIMAROPA, Western Visayas, and ARMM, palay were bought for as low as P11/kg to P12/kg.
This means that farmers in these areas had to sell their yield at a loss because the cost of producing palay remains at P12/kg.
The continuous decline in the price of palay is being attributed to the higher amount of imported rice that had so far entered the country under a liberalized regime.
The US Department of Agriculture (USDA) had put in record in its latest report, saying that “consequently”, the Rice Tariffication Law or RA 11203, which replaced the quantitative restriction on rice imports with tariffs, has resulted to the low domestic prices for unhusked rice.
“While this helped lower inflation, the Philippines’ adjustment to rice liberalization remains a challenge,” USDA said.
In the same report, the USDA also said that the Philippines, home to 105 million people, is now getting closer to becoming the world’s top rice importer and is about to beat China, the world’s most populous country with a population of around 1.4 billion.
“The Philippines rice imports have nearly quadrupled, from 800,000 metric tons in 2016 to 3.1 million anticipated for 2019, representing 7 percent of total global rice imports. In comparison, China’s share of global rice imports has almost reduced by half, to just over 7 percent,” USDA said.
“While China rice imports continue to shrink, Philippine purchases provide much appreciated reprieve from nearby exporters in Southeast Asia,” it further said.
The USDA report came as Agriculture Secretary William Dar announced that the Department of Agriculture (DA) will no longer come up with a decision on the investigation it did to identify whether RA 11203 has indeed caused injury to the local rice sector.
On September 11, 2019, the Philippines notified the World Trade Organization (WTO) of an investigation into the surge in imports, in reaction to the farmgate price dropping nearly 30 percent and the resulting loss of income for farmers.
Under the rules of the WTO and Republic Act 8800, general safeguard duties may be temporarily imposed on imports of rice, on top of regular tariffs, if there is evidence of a surge in rice imports and this surge has resulted in, or threatens to cause, serious injury to the rice farmers.
Dar said the decision to raise the tariffs on rice imports as a measure to protect and save Filipino farmers from the influx of imported rice is now in the hand of the country’s economic managers, who are also the ones who pushed for the liberalization of the sector.
Meanwhile, the average wholesale price of well milled rice also dropped to P38.15/kg during the fourth week of September, falling by 17.2 percent from P46.07/kg a year ago. This is lower by 0.2 percent from previous week’s price of P38.21/kg.