Why panic buyers are finding calm but palay farmers are not

Palay prices have gone down for the seventh consecutive week as farmers struggled to compete with the influx of imported rice amid lower demand from consumers and ebbing relief efforts.

According to the Philippine Statistics Authority’s (PSA) latest price monitoring report, the average farm-gate price of palay during the second week of July went down to P18.49 a kilo after peaking at P21 a kilo in June. This is the seventh week that prices at the farm gate registered a decline—an unusual trend going into the lean season for palay.

The lean months between July and September signal an arduous “waiting time” for farmers; it is the period that separates one harvest from the next. During lean months, palay prices usually pick up given the tight supply.

But the COVID-19 pandemic, coupled with the new rice tariffication law, is also changing price trends.

At the beginning of the lockdown, the government has aggressively imported rice amid panic buying from consumers. Demand, in recent weeks, has normalized to prepandemic levels, however, as buyers have begun adjusting to their consumption patterns while relief efforts have also died down.Federation of Free Farmers national chair Raul Montemayor said the dip in palay prices was something they were already worried about even before the lean season began as imported rice continued to arrive.As of Aug. 7, data from the Bureau of Plant Industry showed that about 1.49 million metric tons of rice entered the country beginning this year, almost half of which arrived two months before the start of the lean season in July.

The Department of Agriculture, upon the ceaseless prodding of industry groups, said they would only be releasing the bulk of rice imports during lean months to avoid unreasonable price spikes in the market and needless competition between local and imported rice.

However, rice prices recorded by the PSA showed minimal price cuts at the retail, reflecting the disconnect between farm-gate and retail rates, often disrupted by middlemen and resellers.

The rice tariffication law is meant to bring down the cost of producing palay to increase farmers’ profit while keeping consumers happy with cheap rice prices. It is a balancing act that has yet to be mastered by economic managers. INQ