Piñol blames economic managers for palay price plunge

MANILA, Philippines — Outgoing Agriculture Secretary Emmanuel Piñol has again taken a jab at the country’s economic team with the farmgate price of palay nowhere near recovering amid the influx of cheap imported rice.

While prices of fruits have dropped by almost 70 percent from pre-harvest levels, Piñol said fruit farmers are not really complaining and it is something that they understand, unlike the country’s rice farmers.

“This is the perfect example of the economic theory that when there is an abundance of supply, prices will drop. Perhaps, this was the same theory that was in the mind of the economists when they proposed and succeeded in flooding the market with imported rice,” he said.

“They failed to realize that unlike fruits, rice is not easily perishable. Fruits could not be kept for long but rice could be hoarded,” Piñol added.

The agriculture chief emphasized that the economic team’s simplistic theory on market forces missed the reality that in the rice trading business, there are hoarders, market manipulators, and the rice cartel that agrees to set buying and selling prices.

“In fact, since traders found that importing rice is more profitable, convenient and less risky, many have opted not to buy locally produced paddy rice, pushing down the price of Filipino farmers’ produce from a high of P20 per kilogram last year, to as low as P12 to P14 today,” Piñol said.

“This is one case where economic theories ran smack and got KO’d by the realities of the rice industry, the country’s staple food and a hot political issue as well,” he added.

Piñol called on some economists to look beyond the graph and get out of their air-conditioned offices to see things on the ground.

“Also, they should not be obstinate and show humility by admitting that not all economic theories work in the real world,” he said.

Lawmakers are now calling for a Senate inquiry on the impact of the Rice Tariffication Law on farmers and the local rice industry, almost five months after it took effect.

Approximately 200,000 farmers have stopped working on food production and about 4,000 rice mills have stopped operating amid the deluge of imported rice in the market.

The steep drop in farmgate prices of palay, four months after the implementation of the law, will result in an estimated loss of P114 billion for Filipino farmers for the entire year.

At the other side of the market chain, however, retail rice prices have not gone down significantly.

Rice farmers are now being discouraged from toiling in the farms because their produce are purchased at lower prices, and despite the rice imports and the lower palay prices, consumers still buy at high prices.