(Ellson Quismorio/ MANILA BULLETIN)

Rice shortages at the local level could become an offshoot of the Malacañang-imposed rice price ceiling, economist-solon Albay 2nd district Rep. Joey Salceda said on Saturday, Sept. 2. 

"Price ceilings can have negative second round effects, such as shortages. If we want to avoid any shortage, the price ceiling must not be higher than equilibrium price," Salceda said in a statement. 

"So, to avoid shortage, the DA (Department of Agriculture) must ensure that there is indeed enough supply in the market across all geographical areas," said the Committee on Ways and Means chairman. 

President Ferdinand "Bongbong" Marcos Jr.'s Executive Order (EO) No. 39 imposed a P41 per kilo price cap for regular milled rice and P45 per kilo price cap for well-milled rice. Marcos is the concurrent DA secretary. 

Salceda said that the monitor of rice supply must not be done at the aggregate national level, but in a localized manner. 

"If you impose a price ceiling but some areas have less rice than they need, you will see supply problems in the rice-deficit areas. So, supply monitoring must also be localized and some augmentation must take place in rice-deficient areas." 

At any rate, the Bicolano acknowledged that the price cap was justified given the "arbitrage and undue padding of margins in the sector, and a rice price ceiling will help put a stop to that behavior." 

"A rice price ceiling is a signal to those who wish to do price speculation that there is little profit in doing that. In that sense, it will help prevent hoarding," he said. 

Salceda further commented that, "Ultimately, rice prices will fall down when India rescinds its rice export ban. But it highlights how our rice policy must remain focused on enhancing domestic yields." 

"If we are able to produce yields at Vietnam levels (5.6 tons per hectare) from our current level (4.1 tons per hectare), we can close our domestic supply shortage, and be less sensitive to movements in the world market," he said.