Palay prices continue to fall

Published October 22, 2020, 12:24 PM

by Madelaine B. Miraflor

DA readies cash assistance to farmers

The farm-gate price of palay continues to drop during the fourth week of September, with prices in some areas still below the breakeven price farmers had spent for the last planting season.

The good news is that the Department of Agriculture (DA) was recently directed by the Senate to set aside some money from the excess of rice import tariff collection for the immediate distribution of cash assistance to rice farmers.

The latest data from the Philippine Statistics Authority (PSA) showed that during the last week of September, the average farmgate price of palay went down further to P16.26 per kilogram (/kg) or by 3.4 percent during the period, from its level of P16.84/kg in the previous week.

Year-on-year, the price picked up by 2.8 percent from its average price of P15.82/kg in the same week of the previous year.

During the period, provinces like Surigao del Sur, Davao, North Cotabato, and Quezon province saw palay prices dropping to as low as P12/kg to P13.92/kg, which means some farmers in these areas had zero to significantly low earnings during this harvest because to produce a kilo of rice in the Philippines, Filipino rice farmers have to spend P12.72.

Some even said that with such production cost, the breakeven farmgate price of fresh harvest should be around P14.50/kg.  

Trinidad Domingo, a rice farmer in Nueva Ecija and a member of National Rural Women Coalition (PKKK), said that her production cost in rice actually doubled compared to previous years.

“Before, I only spent P31,000 per hectare during the planting season. Now, I spend around P60,000 per hectare and since I own two hectares, I spend more than P100,000 just to be able to plant,” Domingo said in a virtual briefing.

“As for palay, I used to sell it for P16/kg. Now, during this harvest season and here in Nueva Ecija, which the government calls the rice granary of the Philippines, palay prices are being sold at P8/kg to P14/kg. Farmers are barely making money. Who do we turn to if the government is claiming prices are high at P19/kg. NFA [National Food Authority] already stopped buying palay,” she added.

To recall, citing data from Philippine Rice Information System (PRISM), Agriculture Secretary William Dar celebrated the increase in palay prices during this harvest season.

According to him, palay prices have already increased to P19/kg in some areas in the country, particularly in Nueva Ecija.

Dar also ordered NFA, whose sole mandate is to secure the government’s buffer stock, to intensify its palay procurement. The state-run grains agency buys palay at P19/kg.

Meanwhile, the DA is now finalizing the mechanics of the two forms of cash assistance to millions of small farmers and fisherfolk, following the joint resolution recently passed in the Senate.

The Senate joint resolution authorizes the use of the tariffs on imported rice in excess of P10 billion collected by the Bureau of Customs for 2020 under the Rice Tariffication Law (RTL), the law that allowed the unlimited importation of cheaper rice.

The initial estimate of the excess rice tariffs in 2019 and this year may amount to P5 billion, which as per the joint senate resolution will be used as cash assistance worth P5,000 to benefit small rice farmers who are tilling one hectare or less.

The proposed measure is similar to the previously legislated cash aid called Rice Farmers’ Financial Assistance (RFFA) and Financial Subsidy for Rice Farmers (FSRF).

To qualify, farmer-beneficiaries should be listed in the Registry System for Basic Sectors in Agriculture (RSBSA).

Aside from rice farmers, fisherfolk, and corn, coconut, and sugar farmers, as well as indigenous peoples (IPs) will also receive cash and food assistance from “Bayanihan 2”, which granted the DA as much as P24-billion stimulus package.

To be specific, they will receive P5,000-worth of cash and food assistance. Of this, P3,000 will be given in cash, while the P2,000 will be in kind, at P1,000 for rice and the other P1,000 for chicken and eggs.

Based on the DA’s initial program mechanics, the rice, chicken and eggs will be withdrawn by the beneficiaries using an e-voucher system. Qualified recipients will be issued an ID cum voucher.

“Through this mechanism, we are lifting once again our local rice industry that has been affected by the decline in palay prices, and poultry raisers who were affected by a glut due to shut down of businesses due to the pandemic,” Dar said.