Fall in palay prices now on its sixth month

The downtrend in palay prices has entered its sixth month, reinforcing the need for more government interventions as struggling farmers await a much-needed buffer fund.

Based on the Philippine Statistics Authority’s weekly price monitoring report, the average farm-gate price of palay has declined anew to P17.85 a kilogram as of the fourth week of June, down 16.51 percent from year-ago prices.


During this period, a kilo of regular milled and well-milled rice was sold at P38.56 and P42.92, respectively, from P40.69 and P44.37 in the same period last year.

According to the Samahang Industriya ng Agrikultura, farmers, especially from Nueva Ecija and Isabela, have complained farm-gate prices have dropped to P13 a kilo. The group said current rates were barely enough to cover production cost, currently at P12 a kilo.


The continuous decline in rice prices is due to the arrival of more affordable imported rice following the passage of the rice tariffication bill.

According to the Department of Finance, the government had already generated P5.9 billion in additional revenue from the imposition of tariff on rice imports, and this was expected to swell as the country entered lean months.

While a joint study by the National Economic and Development Authority and the International Food Policy Research Institute bore a rosy outlook for the country following the deregulation of rice trade, it also recommended the provision of cash transfers to local rice producers to help them cope with a more competitive rice regime.

Cash transfers, the study noted, were preferred over subsidies and price supports over the short term. Such program was crucial especially with the adverse effects of climate change continuing to worsen, the study added.

Total cost of the impact of climate change to the country is estimated to reach P1.82 billion by 2050, or P46 billion per year.

Nonetheless, preliminary outcome of policy simulations showed rice liberalization could improve the country’s gross domestic product by 0.44 percentage points under a 35-percent tariff rate, and would lead to the expansion of the sector as farmers abandon rice farming for more profitable crops.

Tariff receipts from the new policy are also seen to significantly increase rice yields and farm productivity in the long run if the government would bulk up its investments in research and irrigation, among others.


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