P20/kilo rice is ‘daydreaming’ – Duterte

DAVAO CITY, Philippines — Pegging the price of rice at P20 per kilo is “daydreaming” given the law of supply and demand in the world market, former president Rodrigo Duterte said yesterday.

Duterte said that retail prices of rice could even reach as high as P90 per kilo.

He said Filipinos should accept the fact that there is no way for the price of rice to go down to P20 per kilo, which is too low and not realistic, considering the present market situation.

Duterte said the prices of fertilizers and other farm implements are going up.

“By our standard, P20 is masyadong mababa yan (too low), and rice-producing countries have also limited the volume of rice they could export as they also do not have enough land to plant rice on. It is development, from forestal to agriculture, then to commercial,” Duterte said.

He said the government should be ready to lose at least P3 billion for it to buy rice at a higher price and sell to the people at a lower price to prevent a possible “revolution” resulting from the food crisis.

To cushion the impact of the implementation of Executive Order 39, which sets a price ceiling on regular and well-milled rice, the Department of Social Welfare and Development (DSWD) launched its Sustainable Livelihood Program (SLP) in anticipation of small rice retailers’ losses from the temporary price cap.

The EO took effect on Tuesday. It capped prices for regular-milled and well-milled rice at P41 and P45 per kilo, respectively.

The SLP is a capacity-building program that provides startup capital for those who wish to start a small business.

To cushion the impact of food crisis, the government must be able to get hold of the current supply of rice stored in various warehouses and place it on embargo.

This way, the government can control the existing rice supply.

The Federation of Free Farmers (FFF) rejected proposals to temporarily reduce tariffs on imported rice to ease prices of the staple as this could lead to further losses to farmers.

As rice was a major inflation driver in August, which accelerated by 8.5 percent, the National Economic and Development Authority (NEDA) suggested to temporarily reduce tariffs to help lower domestic prices.

At present, importers are enjoying a reduced tariff of 35 percent on rice until yearend as provided under EO 10, from the original rate of 50 percent.

The FFF said some recommended to reduce this further to 10 percent, supposedly to allow cheaper imported rice to augment local stocks.

In a statement, FFF national manager Raul Montemayor said the suggestion could cause palay prices to drop by P6 per kilo, leading to farmers’ income losses amounting to P120 billion in a year.

He said the losses could not be offset by the P10-billion allotment for the Rice Competitiveness Enhancement Fund as provided under Republic Act 11203 or the Rice Tariffication Law.

Montemayor expressed doubts that a tariff reduction would result in cheaper prices as retail prices continued to increase even after the government slashed tariffs on rice coming from non-ASEAN member-states to 35 percent from 50 percent starting in 2021.

Instead of heeding tariff reduction proposals, the FFF said President Marcos should hold its proponents accountable for the damage they have inflicted on small farmers and the agriculture sector resulting from their past flawed prescriptions. – Ramon Efren Lazaro, Bella Cariaso