Farmers seek help as palay prices tumble
The average buying price of palay further declined last month just after the government released the implementing rules and regulations for the new rice law—seen to deregulate the entry of imported rice in the market and give the local rice industry a boost by subsidizing its development.
Based on the Philippine Statistics Authority’s price monitoring report as of the first week of April, the average farm-gate price of palay further slipped to P18.70 a kilo, down 9 percent and 3.6 percent from year-ago and month-ago levels, respectively.
The downtrend has not stopped since January due to various factors, including speculations that the new rice law would force local produce out of the market and the continuous entry of imported rice just as the harvest season began.
But according to Assistant National Economic and Development Authority (Neda) Secretary Mercedita Sombilla, the decline in farm-gate prices was normal since the rates were just going back to their standard levels.
“If you look at the statistics, the farm-gate price is still in the ballpark figure. The farm-gate prices that are prevailing right now against years before 2018 do not have much difference,” she said.
She added that the average buying price of palay breached P25 a kilo last year due to “abnormal” market conditions, citing the shortfall in the supply of National Food Authority rice that led people to believe that there was a rice shortage on the national scale.
However, industry groups said that factoring in the increase in the cost of producing palay due to the rise in fuel prices because of the Tax Reform for Acceleration and Inclusion Act, the prevailing buying price right now was still lower against previous years.
Economic managers had been allaying fears of local rice producers caused by the passage of the rice import liberalization law by ensuring that the annual P10-billion subsidy for the sector would be used accordingly.
Of the P10-billion rice fund, P5 billion will be directed to PhilMech for the distribution of machinery and equipment to farmers, while P3 billion will be given for seed distribution, P1 billion for credit and P1 billion for training and seminars.
The rice fund is expected to bring down the production cost for palay at a rate competitive with those in other rice-producing countries such as Vietnam and Thailand, where a majority of the country’s imports are being sourced.
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