President Ferdinand R. Marcos Jr. has shown anew his determination to grab the proverbial bull by the horns by issuing Executive Order No. 39 (EO 39) setting a mandatory price ceiling of ₱41 per kilogram of milled rice and ₱45 per kilogram of well-milled rice, effective tomorrow Sept. 5, 2023. These price ceilings shall remain in full force and effect unless lifted by the President upon the recommendation of the Price Coordinating Council or the Department of Agriculture (DA) and the Department of Trade and Industry (DTI).

Recall that during the past month, fears of a rice shortage were quickly doused by the President himself. Pictures of a warehouse with a floor-to-ceiling stockpile of sacks of rice also delivered the message with even greater impact.

According to EO 39: “(T)he DA and the DTI have also reported that the widespread practice of alleged illegal price manipulation, such as hoarding by opportunistic traders and collusion among industry cartels, in light of the lean season, as well as global events taking place beyond the Philippines’ control, including the Russia-Ukraine conflict, India’s ban on rice exportation, and the unpredictability of oil prices in the world market, among other factors, have caused an alarming increase in the retail prices of this basic necessity.”

On closer analysis, the Russia-Ukraine conflict has been raging since February 2022, and volatility in the price of oil in the world market has long  been a major environmental risk factor, while the possibility of India being a source of rice exports is only a recent development.

Yet, why did the Chief Executive, who is concurrently the Secretary of Agriculture, decide to impose price ceilings to ensure that the price of this most vital prime commodity — the staple food of millions of Filipino families — is maintained at an affordable level?

First, it could be inferred that the DA is not comfortable about the sufficiency of buffer stocks between now and the start of the harvest season. Second, both the DA and the DTI have assessed that “widespread” price manipulation must be met aggressively with more emphatic government intervention. Third, those engaged in cartel activities are testing the government’s political will; thus, decisiveness in law enforcement must be demonstrated.

While consumers are being protected against unreasonably high prices, equal emphasis must be placed on enabling rice farmers to increase production and improve their families’ well-being. The Rice Competitiveness Enhancement Fund (RCEF) must be used to assist farmers in improving productivity with higher-yielding rice seeds, farm machinery and equipment and training.

Meanwhile, the Foundation for Economic Freedom (FEF) is recommending that instead of imposing price ceilings, the government should reduce import tariffs from 35 percent to 10 percent — arguing that “this will have an immediate effect on lowering rice prices.”  Tariff rates may be raised anew if a good harvest “results in falling rice prices” and  the demand-supply situation has been stabilized. As a long-term measure, the FEF also envisions the emergence of commercial agriculture that would address both the food and nutrition requirements of a growing population.

Collective action is needed to address this critical problem on bringing food to the tables of millions of Filipinos at affordable prices.