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Gov’t asked to address high rice prices, low palay farmgate rates

Despite the influx of imported rice and the steady decline in farmgate prices of palay, prices of the staple in the market remain high, according to the Federation of Free Farmers (FFF).

Citing government data, the FFF said the decline in rice prices compared to year-ago levels was minimal, showing that the liberalization of the rice industry was not working.

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Data compiled by the group from the Philippine Statistics Authority (PSA) showed that while the average buying price of regular milled and well-milled rice had gone down by P7.54 and P6 a kilogram from their peak in September last year, these were still higher than the prices in 2016 and 2017.

Rates in 2018 were not used given the artificial increases in prices brought about by the shortage in the supply of subsidized rice and the delayed arrival of imported rice during the period. Officials from the National Economic and Development Authority and the Department of Finance said rates last year should not be used as the basis in comparing rice prices.

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For the years 2015 to 2017, the average buying price of palay was at P18.53 a kilo. This is higher by 3.51 percent than the prevailing rate this year of P17.88 a kilo.

However, regular milled and well-milled rice are currently sold at the average prices of P38.60 and P42.91 a kilo, respectively, higher than the 2016 and 2017 prices of P37.68 and P41.66 a kilo.

The rule of thumb in setting the retail price of rice is double the buying price of palay. Hence, ideally, prices of rice in the market should be an average of P36 a kilo.

“It is interesting to note that the present retail prices of rice are still higher than in 2016 and 2017, when the quantitative restrictions on rice imports were still in effect and the new rice law has not yet been passed,” said Raul Montemayor, national manager of the FFF, which represents farmers nationwide.

“What is most painful to the farmers is the fact that their sacrifices are apparently going to waste because consumers are not getting the benefits arising from the decline in palay prices and the entry of supposedly cheaper imports,” he added.

“The PSA data, in fact, appears to show that both consumers and farmers were better off when the quantitative restrictions were still in place, if we exclude the abnormal price movements in 2018,” said Montemayor.

The FFF official added that the government must focus on addressing the problems of small-holder palay producers especially now that the harvest season was about to begin.

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“They (government) did not prepare for the impact [of the measure] on farmers. What has happened is that there’s a supply glut from both imported and local produce. How do you address it? What is the game plan?” Montemayor said.

Until now, farmers are waiting for the benefits of the law, which was supposed to give them an annual subsidy of P10 billion to modernize their operations. The fund will be used to provide equipment and machinery, seeds, credit, and training.

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TAGS: Business, Federation of Free Farmers (FFF), rice prices
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