Fertilizer subsidies seen as solution to rising rice prices

FERTILIZER SUBSIDIES can help temper the possibility of higher rice prices amid rising input costs, according to the Department of Agriculture (DA).

“If rice prices go up in the global market, local rice prices will follow. If production declines this main wet season due to high fertilizer and petrol prices, and global rice price rise, we will see significant increases in rice prices by the end of this year,” DA Undersecretary Fermin D. Adriano said in a statement.

“Thus, it is imperative for the government to give fertilizer and petrol subsidies to farmers now, to prevent productivity decline,” he added.

Agriculture Secretary William D. Dar said that the department currently has P3 billion in fertilizer subsidies for rice and corn farmers, but that it requires more than this to accommodate the needs of farmers during the wet planting season.

“We need more, and that’s why we have requested the National Government to give us about P6 billion more — so a total of P9 billion is needed to give us [a] fertilizer subsidy this wet season planting… any opportunity to level up local rice production is necessary,” he said in a virtual briefing on Thursday.

“Otherwise, the decrease in production may happen because the farmers are not able to apply the levels of fertilization they had last year,” he added.

Mr. Dar said the DA is also working on broadening its sources of rice imports to meet demand.

“So that we can still buy the same prices now that are very affordable. India is one of the markets where we can buy [that] price,” he added.

P20/KILO RICE
The agriculture secretary said that President-elect Ferdinand R. Marcos, Jr.’s proposal to lower the price of one kilo of rice to P20 would be supported by the department, though this would require time and research to accomplish.

“I like the aspiration of our President-elect and we are looking at every possibility we have to work this out with various stakeholders. We have to identify the gaps, the challenges, and put up a program designed towards that,” he said.

“It will take some time before we can go to the near P20. I am saying publicly, I am for working for the program design and solutions through a value chain approach to go near the P20,” he added.

REDUCED TARIFF
In May, President Rodrigo R. Duterte signed Executive Order (EO) No. 135, which reduces the tariffs on rice imports from non-ASEAN countries from 50% to 35% for a period of one year in order to reduce the country’s dependence on Vietnam and other ASEAN rice exporters.

The farmers group the Federation of Free Farmers (FFF) said in a statement that the reduced tariffs will not result in lower prices for rice.

“There was no urgent need to issue the EO. Rice prices and inventories have been stable. Imports have continued to come in and even increased during the first quarter of the year. Clearly, Mr. Duterte, at the instance of his economic managers, simply wanted to preempt Congress before it resumed its sessions,” FFF National Manager Raul Q. Montemayor said.

UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said that these tariff policies can affect rice prices and subsequently, inflation.

“Rice has been a major component of inflation and has caused huge increases in inflation levels in the past. So far, rice inflation has been stable and has not been a major factor in recent spikes in inflation. Although controlling prices is not the end-all be-all, we have to look at the impact of this kind of policy especially during these very volatile times in the global economy,” he said in an e-mail.

“The government has to be very careful and be product-specific in its responses to the change in policy. However, I still believe that the government has to go to longer-term solutions versus quick-fix responses like this,” he added. — Luisa Maria Jacinta C. Jocson