Price freeze on rice seen to hurt farmers

Published April 14, 2020, 12:00 AM

by manilabulletin_admin

By Madelaine B. Miraflor

A group of farmers said that rice should be exempted in the expanded price control that the Philippine government has imposed on select agriculture and food items, a move seen to curb irregularities in the market caused by coronavirus-triggered lockdown.

Federation of Free Farmers (FFF) President Raul Montemayor said that price freeze over rice, the country’s main staple, may negatively impact rice farmers during the on-going harvest season.

“Farmers are harvesting now, palay prices are inching up, to the relief of millions of rice farmers who lost an average of 25 percent of their income in the last two seasons due to excessive imports following the enactment of the Rice Tariffication Law in 2019,” Montemayor said on Tuesday.

“Limiting rice prices to pre-COVID levels means keeping palay prices at breakeven or losing levels. Farmers already lost more than ₱80 billion last year. It is grossly unfair to ask them to keep on sacrificing when they have already suffered greatly and are also victims of the virus,” he added.

On Monday, the Philippine government has tightened its control over food prices with the issuance of updated list of agriculture and food products that will be covered by price freeze and suggested retail price (SRP).

As part of this, price freeze was imposed on imported rice at ₱51 per kilogram (/kg) for special, ₱42/kg for premium; ₱40/kg for well milled; and ₱39/kg for regular.

For local rice, prices should not go beyond at ₱53/kg for special, ₱45/kg for premium; ₱40/kg for well milled; and ₱33/kg for regular; NFA rice at ₱27/kg.

Montemayor suggested to allow prices to “seek their own level” while the government must ensure that the National Food Authority (NFA) has enough rice to distribute to government agencies and local government units (LGU) so that select poor areas could still have access to the staple.

During the summer harvest, up from this month until May, the NFA targets to buy 4 million bags of palay.

The agency is also now aggressively buying in regions where harvest is peaking, such as Cagayan Valley, Central Luzon, Western Visayas, as well as Western, Northern and Central Mindanao. NFA buys palay at P19/kg support price.

“Government can still monitor prices and watch for hoarding and manipulation, but rice prices must be based on current palay buying prices, not pre COVID rates,” he reiterated.

He also said that it is possible to cap prices for imported rice.

“This will be hard to implement because there are different grades for rice, and international prices now are volatile. The price cap today might not be relevant anymore next week,” Montemayor further said.

According to him, what the Philippine government can do is to impose a price cap after harvest season.

“[They should do it] during the lean months of July to September but base the cap on how much palay was bought in the previous season so that traders will also earn. If the cap is too low, traders will penalize farmers with low palay prices the next season to recoup their losses,” Montemayor said.