THE Department of Agriculture (DA) said it is seeking to rein in what it called “uncontrolled” market prices for rice by imposing a suggested retail price (SRP) system for the staple grain.
Agriculture Secretary Emmanuel F. Piñol said the DA is currently drafting a memorandum of agreement (MoA) with the Department of Trade and Industry (DTI) to implement the SRP system.
“We will now be using the Price Act as basis for addressing the uncontrolled prices in the market. We are coming up with the SRP to curb profiteering,” Mr. Piñol said in a briefing Wednesday, adding that he expects the MoA to be signed within the month.
The farmgate price of palay, or unmilled rice, the form in which domestic farmers sell their harvest, has been falling in recent months. Palay prices have been under pressure from the threat of competition from cheaper foreign grain that is now imported more freely after the enactment of rice tariffication.
Mr. Piñol said the SRP on imported commercial rice will be based on the landed cost, while the price of palay will help determine the price ceiling for domestic rice, with the exact price levels to be determined by the DTI, Department of Finance (DoF), and the National Economic and Development Authority (NEDA).
Before the tariffication law, the National Food Authority (NFA) was effectively the commodity’s price regulator, helping moderate local swings in price and supply by releasing quantities of subsidized rice, as a way of ensuring poor families could access the staple.
Mr. Piñol met with rice industry stakeholders on Tuesday, discussing possible market distortions produced by the Rice Tariffication Law, like the attractive profits to be realized from selling importing rice, at the expense of domestic producers.
“Everybody would like to import to the detriment of the Filipino farmer, wala nang gustong bumili ng (nobody wants to purchase) local palay,” he said.
“This was not the intent of the law. The intent is to make affordable rice available to consumers. That’s the purpose,” he said.
He said it is too early to talk about amending the law, and his focus for now is to “plug loopholes.”
The Rice Tariffication Law, which liberalized rice imports by private traders who must pay a 35% tariff on most of their shipments, particularly on rice from Southeast Asia, is pressuring farmers to sell their harvest for less while also depressing future planting intentions.
Mr. Piñol said in a social media post on Wednesday that according to Customs records, the landed cost of Myanmar 25% broken rice is P18.22 per kilo; Vietnam 5% broken P25.33; and Thailand 5% broken is P23.06.
In early July, the Bureau of Customs (BoC) reported that it collected a total of P5.9 billion in tariffs from P1.43 MMT of rice imported by private traders flowing the implementation of the Rice Tariffication Law.
The Philippine Statistics Authority (PPSA) estimates that the average farmgate price of palay fell 0.3% week-on-week during the fourth week of June to P17.85 per kilogram (kg), suggesting that many farmers are disposing of their harvests to private traders at well below the price they might obtain at the NFA, which acquires palay for a base price of P17 plus incentives that can bring the final price up to P20.70.
The NFA is now exclusively focused on buying rice from domestic farmers to maintain its grain reserve. — Vincent Mariel P. Galang