By Cai Ordinario, September 3 2019; Business Mirror
https://businessmirror.com.ph/2019/09/03/steep-drop-in-local-palay-prices-surprises-neda/
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THE National Economic and Development Authority (Neda) admitted on Monday that it did not expect the farm-gate prices of rice to fall below production cost and that this did not figure in its market study.
Neda Assistant Secretary Mercedita A. Sombilla told the BusinessMirror the decline in the farm-gate price of rice may be due to “transitional adjustments” after the rice trade liberalization law, or Republic Act (RA) 11203, took effect.
Sombilla said this could have also been brought about by the delay in the release of the P10 billion for the Rice Competitiveness Enhancement Fund (RCEF).
“We hope we could really give more time for this to roll out all the components and all the interventions…to make the market competitive,” she said in an interview on the sidelines of the hearing on the implementation of the rice trade liberalization law held at the House of Representatives.
Sombilla said she is hopeful that Agriculture Secretary William D. Dar can talk to traders and persuade them to buy local first before considering the purchase of rice from abroad.
“The importers should have really gone to the local producers first before going to the [international] market,” she added.
Sombilla said she will also discuss with the Philippine Statistics Authority the low farm-gate price of rice. Based on PSA data, dry rice goes for P17 per kilogram to P18 per kg, while wet rice is bought for P13 per kg to P14 per kg.
National Statistician and Civil Registrar Dennis S. Mapa said he is already verifying reports about the low farm-gate prices of rice.
“I am asking my provincial staff to verify the data. I am aware of this concern and I have been talking with my staff in the field offices,” Mapa told the BusinessMirror via SMS.
Rep. Estrellita B. Suansing of the First District of Nueva Ecija disclosed during the hearing that the farm-gate price of rice in her province has dropped to as low as P7 per kg.
Suansing said this could further go down to P5 per kg once Nueva Ecija farmers start harvesting wet season rice. The Neda had said Nueva Ecija will remain competitive in rice production even after the quantitative restriction on the staple is removed.
“So there are pockets, areas where rice prices are really low and there’s a need to reach these places,” Sombilla said. “I was recently in Cabanatuan, Talavera several times and also went to Isabela, wet rice averages P12 to P13. These are things that [we] need to verify.”
Safety nets
To help farmers, Action for Economic Reforms (AER) President Jessica Reyes-Cantos said the government should consider extending conditional cash transfers to farmers.
In a statement, Cantos expressed support for Dar’s “quick reaction” to provide P15,000 per farmer as loan at zero interest payable in eight years through the Agriculture Credit Policy Council (ACPC).
This program will initially benefit some 100,000 farmers owning lands 1 hectare and below. It is estimated that there are some 2 million rice farmers.
“We hope that Unconditional Cash Transfer can be provided for those who will not be covered by the ACPC loan. Let us not forget in the narrative the remaining 500,000 small farm owners who are also suffering from the worsening situation in our market,” she said.
Filomeno Sta. Ana, co-convener of AER, added that a cash transfer of P5,000 per cropping season for 1.7 million farmers is a “small price to pay.”
In a position paper submitted to the House Committee on Agriculture and Food Chairman Wilfrido Mark M. Enverga, AER said without safety nets, around 600,000 to 700,000 farmers would be impoverished or at risk of poverty.
The rice tariffication law signed on February 14 of this year was projected to reach P15 billion. As stated in the law, P10 billion of the total collection will be allocated for seeds, mechanization and extension component of the program. The excess P5 billion of the total will be used for giving financial assistance to farmers.
