Advertisement

Finance dep’t notes ‘disconnect’ between rice farmgate, retail prices

Font Size

farmer rice field
PHILSTAR/EDD GUMBAN

THE Department of Finance (DoF) said it will look into “potential distortions” in the rice market, citing the wide gap between farmgate and retail prices.

In a statement Monday, the DoF estimated that the average gap between the two prices is P22 per kilogram (kg), assuming an average retail price of P37.51 for regular milled rice, against a P15.71 average farmgate price of dry palay, or unmilled rice.

DoF noted that biggest price gap was P29.75 in Iloilo, followed by P28.50 in Zamboanga del Norte, P28.01 in Negros Occidental, P25.33 in Kalinga and P25.25 in Bulacan.

“The palay price is still falling but the retail price is not falling as fast so there’s a growing disconnect,” Finance Undersecretary Karl Kendrick T. Chua said during a recent DoF Executive Committee meeting.

According to the Philippine Statistics Authority (PSA), the price of palay in the fourth week of October fell 0.4% to P15.43. Year-on-year, the average price fell 24.2%.

The average retail price of well-milled rice fell 0.3% to P41.75 and fell 12.8% year-on-year. The average retail price of regular-milled rice decreased 0.2% to P37.02, while falling 16.9% year-on-year.




Mr. Chua added that the wide gap last month between the farmgate price and the retail price might indicate issues in the “middle supply chain.”

Rice imports totaled 2.9 million metric tons (MT) in the 10 months to October, according to the Bureau of Customs (BoC). Imports since March totaled 1.87 million MT, when the Rice Tariffication Law took effect, which liberalized rice imports.

The PSA has said that in the third quarter, palay production declined 4.53% to 3.051 million MT.

In late October, the Philippine Competition Commission (PCC) said it is gearing up to investigate whether middlemen are behind the wide gap between what traders pay to buy rice from farmers, and the retail price of rice.

Rice industry stakeholders have been pushing the government to repeal the Rice Tariffication Law due to the decline in prices paid to farmers, and announced protests starting Nov. 20, Federation of Free Farmers Chairman Leonardo Q. Montemayor said in a news conference Monday in Quezon City.

“Our calls for the repeal of the Rice Tariffication Law are valid. In the past months, we have witnessed how this abominable law has pushed the Philippine rice industry to the brink of destruction and extinction,” Kilusang Magbubukid ng Pilipinas (KMP) Chairman Emeritus Rafael V. Mariano said.

The industry is also calling for a halt to rice imports to help farmers recover.

Mr. Montemayor noted that rice farmers have foregone potential revenue of P60 billion since May, possibly rising to P140 billion by the end of the year.

Responding to reports that President Rodrigo R. Duterte has ordered a halt to rice imports, the Department of Agriculture (DA) said that there are no formal instructions to do so. Halting imports may also require a revision of the law, which would take time to get through the House of Representatives and the Senate.

“No formal communication yet. We have seen the report, so we are awaiting, if any, a directive from the Palace,” Agriculture Spokesperson Noel O. Reyes told reporters.

“If a law needs revision, it has to be a joint decision of both houses of Congress to repeal the law,” he added. — Vincent Mariel P. Galang

Advertisement