Suffering rice farmers told: Palay prices just going back to normal levels

Farmers continue to suffer from the downward trend in the buying price of palay, which started five months ago, but economic managers insist rates are only going back to their “average” levels after coming from an “abnormal year.”

Based on the latest price monitoring report of the Philippine Statistics Authority, the average farm-gate price of palay dipped to P18.26 a kilogram as of the third week of May, down 13.13 percent from the same period last year.

Local palay growers started the year with a price point of P19.95 a kilo, but since then, prices have registered declines per week.

Farmers in Nueva Ecija said that while harvest had been good, prices had declined by as low as P14 a kilo. This is especially difficult for palay growers who are not part of any organization or cooperative since they have to shoulder their production costs on their own.

Prevailing prices of palay this year pale in comparison from last year, when prices breached the P25 a kilo-mark—the highest recorded rate for palay.

National Economic and Development Authority Assistant Secretary Mercedita Sombilla and Monetary Board member Bruce Tolentino said in separate statements prices this year should not be compared to last year, given the abnormalities of prices and supply during the period.

“Last year was an abnormal year because prices for commodities were unusually high due to oil and food supply shocks, so it is not good to compare 2019 with 2018,” Tolentino said. “It’s better to compare 2019 prices with the seasonal average of the past three to five years.”

“If you look at the statistics, farm-gate prices that are prevailing now don’t have much difference with the price levels the year before … We’re still in the ballpark figure,” Sombilla said.

For the years 2015 to 2017, the average buying price for palay was at P18.53 a kilo.

However, industry group Samahang Industriya ng Agrikultura said comparing palay rates from previous levels did not factor in the fact that production costs had gone up following the passage of a new tax law.

Tolentino said prices should continue to move to moderate levels following the deregulation of rice trade, which would see the influx of cheap imported rice in the markets.

Farmers are expected to benefit from the new policy via financial assistance from the government, which would come from an annual subsidy of P10 billion for six years and from import duties collected thereafter.