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Falling farm-gate price of palay worries farmers

/ 05:09 AM January 14, 2019

Local rice producers have begun complaining about the steep decline in the farm-gate price of palay this year.

Due to the shortage of subsidized rice in the market last year coupled with the tight supply of the staple, the farm-gate price of palay peaked at P25 a kilo in the latter part of 2018. However, farm-gate price has now returned to its average of P15 a kilo.

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The current farm-gate price is deemed too low considering that the local production cost of rice is P12 a kilo, almost double that in Vietnam at P6.50 a kilo and also higher than Thailand’s P9 a kilo. Vietnam and Thailand are the world’s biggest producers of rice.

Farmers still cannot rely on the subsidy provided under the Rice Tariffication bill since the measure has yet to be signed by President Duterte and the subsidy is still not included in this year’s budget, industry group Samahang Industriya ng Agrikultura (Sinag) chair Rosendo So said.

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“Farmers still have to wait until next year or until President Duterte signs the bill,” So added.

The decline in the farm-gate price of palay was attributed to the oversupply of the staple in the market as local harvests added to existing inventory of imported rice.

Last year, about 2.5 million metric tons (MT) of rice were imported by the National Food Authority and the private sector, the highest on record since 2008.

According to Sinag, palay from the previous harvest season has yet to be processed and consumed.
In the meantime, Agriculture Secretary Emmanuel Piñol assured rice producers that the Rice Tariffication measure would not only stabilize prices but would also help farmers improve their competitiveness.

Under the bill, the tariff that would be collected from rice imports would be put under the Rice Competitiveness Enhancement Fund, which is estimated to reach P10 billion yearly.

“The government is expecting that with the fund, the production cost for rice will be reduced since part of the fund will be used to provide seeds, irrigation and equipment,” Piñol said.

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TAGS: Business, palay, rice
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