Rice prices remain stable despite tax reform

The National Food Authority (NFA) and the private sector have assured the public of minimal to no increase in rice prices, allaying concerns that the staple commodity would be affected by the new tax reform law.

With the rise in fuel prices under the TRAIN (Tax Reform for Acceleration and Inclusion) law, shipping of agricultural commodities like rice is expected to shoot up.

However, NFA administrator Jason Aquino said the agency would continue to sell rice at the government prescribed price of P27 a kilo (kg) for the regular milled variety and P32 a kg for the well-milled variety.

“As watchdog of national food security, the NFA’s role is to make rice, our basic staple, available, accessible and affordable in any part of the country at all times,” Aquino said.

Meanwhile, private traders who talked to the Inquirer this week said that consumers could expect just a minimal P1 increase in rice prices until the end of March.

“The increase in fuel prices will result in a P50 increase per 50 kg of rice, resulting in a P1 increase per kg,” said Jun Aguilar, a wholesale and retail distributor from Cagayan Valley who is also in consultation with the state-run grains agency.

Aguilar added that by April, when harvest season starts, traders were expected to build up their stocks, which could result in surplus of local rice. This, in turn, would stabilize rice prices, he said.

The NFA administrator issued a warning to rice traders not to take advantage of the ongoing belief that the cost of basic commodities was expected to rise as traders unduly increase prices, adding that the agency could sanction traders who would violate the laws.

Although this was the ideal market response, industry group Samahang Industriya ng Agrikultura (Sinag) said the retail price was not reflective of the profit that local farmers get when producing the staple.

It added that with the low procurement price of NFA, it did not really have the power to stabilize retail rice prices.

Last year, the agency was only able to hit 19 percent of its procurement target because of the private sector’s higher buying price for palay or unmilled rice.

“It’s a win-win situation for both the distributors and the consumers, but how about the producers? If the right policies will not be implemented, it’s going to be a lose-lose situation for rice farmers under TRAIN,” the group said.

Latest data from the Philippine Statistics Authority (PSA) showed that farm-gate price for palay was at P18.93 a kg, less than half the retail price of regular milled rice and well-milled rice at P38.05 a kg and P42.31 a kg, respectively.

Last week, the retail price of rice in Butuan and Kidapawan City declined by P1, but rose by P1 in Iloilo and by P0.50 in Tuguegarao. Aside from these provinces, the PSA noted that there were few trading centers that exhibited price changes during the week.