Speed up help to rice farmers, gov’t urged

P8.22B in palay revenues losses incurred due to new rice policy
/ 05:30 AM December 28, 2019

The country’s premier think tank has urged the Duterte administration to accelerate compensation for palay farmers given the rice tariffication law’s adverse effects to their livelihood.

This came after a study was published by the Philippine Institute for Development Studies (PIDS) showing that between April and September this year, local farmers have already lost P8.22 billion in palay revenues because of the new rice policy.


For the next 10 years, increases in farm-gate prices and production were also seen to be curtailed by the influx of affordable imported rice.

“We do not deny the analysis [that] clearly points out the loss suffered by palay farmers. They actually have a point when they ask, ‘why are farmers [going to] take a hit for the Filipino consumers?’ If the consumers really benefit, maybe [rice farmers] can share in the benefit,” Roehlano Briones, the senior researcher who wrote the study, said.


Under the law, an annual rice fund worth P10 billion must be funneled to programs that will help develop the country’s rice industry.

However, Briones said additional revenues from import duties must be used for other purposes as well, such as financial assistance, extended crop insurance and crop diversification programs for erstwhile rice farmers.

He added that the compensation must be enough to offset the huge losses incurred by the producers.

Without liberalization, the PIDS predicted that the buying price of palay could increase by 1.5 percent a year against 0.2 percent a year under liberalization.

Palay farmers’ income was also projected to grow by 2.5 percent yearly to 2024 and would accelerate to 2.9 percent every year until 2030 without the policy. However, farmers’ income is flat initially after liberalization and a 1.8-percent reduction is expected thereafter. Despite these results, Briones said the government must continue implementing the rice tarification law given its long-term benefits to consumers, who are projected to receive a welfare gain of P2.26 trillion over the next decade.

The welfare gain refers to the impact of a government policy, which is assessed by considering the “surplus” that could be gained by consumers and producers from a new kind of transaction.

Between April and September this year, rice consumers have already gained P4.9 billion, PIDS said. “If you want Philippine society to benefit in the long run, we should maintain the law. Otherwise, say goodbye to the P2.26 trillion and go back to the previous policy where Filipino consumers were paying 100 percent more compared to consumers in Vietnam or New Delhi,” Briones said. Several industry groups have been calling for the amendment of the law, but economic managers as well as Agriculture Secretary William Dar said the law should be given at least a year to work before doing any review.


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TAGS: palay revenues, rice farmers, Rice Tariffication Law
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