The Philippine government was urged to buy all locally produced palay as farm-gate prices sank to as low as P12.50 per kilogram (/kg), a move that may cost around P152 billion or a whopping 2,000 percent increase from the current budget of the National Food Authority (NFA) for its palay procurement.
In a statement, Samahang Industriya ng Agrikultura (SINAG) Chairperson Rosendo So said the Department of Agriculture (DA) must set aside as much as P152 billion for palay procurement for this harvest season.
This amount, according to him, should be used by NFA, the country’s state-run grains agency, to buy all locally produced palay at the government buying price of P19/kg so rice farmers will not be forced to sell at the current farmgate prices of P12.50/kg to P13.50/kg.
“Harvest has not reached its peak and yet palay prices already went down significantly,” So said.
To produce a kilo of rice in the Philippines, Filipino rice farmers have to spend P12.72 as against the production cost of farmers in Vietnam and Thailand at P6.22/kg and P8.86/kg, respectively.
This means that the breakeven farmgate price of fresh harvest should be around P14.50/kg
“So, who else will buy palay higher than the current farmgate prices? Member millers of SINAG are complaining because their warehouses remain full. They can’t release their stock at the same time as the continuous entry of imported rice in the country,” So said.
“To those gloating that the Rice Tariffication Law is successful, including the World Bank, how and who is benefitting from it. Both farmers and millers are at the losing end of the law,” he added.
In the country, the government agency tasked to buy the produce of rice farmers is NFA, which only has an annual budget of P7 billion.
RTL, passed in March last year, paved the way for the unlimited rice importation in the country.
So far, this August, as much as 1.6 million metric tons (MT) of imported rice already entered the Philippines, with 600,000 MT more expected to enter the country in the next few months based on the DA’s latest forecast.
As for local palay production, Agriculture Secretary William Dar sees it growing to 22.12 million MT this year, which is equivalent to 13.51 million MT of rice.
Two days ago, the governing board of Mindanao Development Authority (MinDA) passed a resolution calling for lawmakers to review RTL because it is already causing “injury” to Mindanao’s rice sector and its farmers.
The MinDA Governing Board includes MinDA Chair Emmanuel Piñol, Senator Juan Miguel Zubiri, Bangsamoro Autonomous Region in Muslim Mindanao (BARMM) Chief Minister Ahod Murad Ebrahim, and Regional Development Councils and Private Sector Representatives led by local government officials.
According to them, RTL is the reason why rice farmers in some regions in Mindanao are forced to sell their palay for P11/kg this harvest season from an average price of P22/kg two years ago.
Piñol was still heading the Department of Agriculture (DA) when RTL was passed in March last year. Ironically, he was also one of the government officials who were vocal about the possible negative impacts of RTL on rice farmers.
Five months into RTL’s implementation, Piñol already called for the review of the law as it already resulted in the steep decline in the prices of palay while failing to significantly bring down the retail cost of the main staple.