Farmers seek crackdown on rice ‘profiteering’

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A FARMER organization called on the trade department to crack down on traders and retailers who are “profiteering” with still-high retail prices while also forcing farmers to accept low prices for their harvests.

“That is a problem that the DTI (Department of Trade and Industry) and other government agencies should try to prevent… DTI should do its job and not ask farmers to pay the price for their negligence and failure to stop profiteering by traders and retailers,” Federation of Free Farmers National Manager Raul Q. Montemayor said in a statement.

The entry of cheap imports has not brought about a commensurate drop in retail prices, essentially defeating the inflation-controlling intent behind the Rice Tariffication Law. At the same time, traders have turned reluctant to buy domestic palay, or unmilled rice, softening the market for palay, or unmilled rice, the form in which farmers sell their harvest.

The combination of a continuing high retail price alongside a low palay purchase price is thought to increase the margins of all the parties standing between farmers and consumers.

The government has sought to intervene by increasing the support price paid by the National Food Authority (NFA) to P19 from P17, while legislators preparing the 2020 budget have said they will increase the NFA’s procurement budget. The Department of Agriculture (DA) has also encouraged local governments to engage in direct palay purchasing at “fair” prices.

Agriculture Secretary William D. Dar said that the DA has started an investigation that could lead to the imposition of safeguard duties on rice imports and restrictions on inbound shipments by the end of September or early October.

The Philippines has informed the World Trade Organization (WTO) of its investigation.

Republic Act 8752, or the Anti-Dumping Act of 1999, authorizes the government to impose duties on imports of any product priced below fair market value.

The government is also considering the imposition of more stringent sanitary, phyto-sanitary and inspection measures on rice imports.

Trade Secretary Ramon M. Lopez has said he opposes the imposition of the duties, which will be reflected in higher retail prices.

Mr. Montemayor noted that rice imports as of September are equivalent to 20% of the country’s rice requirement.

“We actually need to import at most 10% because our own farmers can produce up to 90% of what we need. There is already a surplus in the country equivalent to 10% which is good for 36 days consumption,” he said.

He called safeguard measures the “most effective and cost-effective” way to address the drop in palay prices.

He added that loans to farmers and intervention by the National Food Authority and local governments will help, but ultimately will be limited by budget constraints.

“The solution is to manage the entry of imports, and then find a way so that they do not create a similar problem in the future,” he said.

According to the Philippine Statistics Authority (PSA), the average farmgate price of palay fell 4.4% during the fifth week of August to P16.68 per kilogram (kg). though the prices offered by private traders in some rice-growing areas have reportedly fallen to the single digits. — Vincent Mariel P. Galang