Is P42 per kilo of rice a fair price for farmers, consumers?

MANILA, Philippines — How much should rice prices be to ensure affordability for Filipinos while remaining fair to producers? For the Department of Agriculture, the answer is P42 per kilo of rice. 

But for peasant groups, there are nuances in pricing that need to be addressed.

Agriculture Secretary Francisco Tiu Laurel Jr. said on Monday, November 18, that retail prices for well-milled rice should be P42 per kilo to strike a balance between consumer and farmer needs. 

“I think well-milled rice around the P42 per kilo will provide a happy balance between our goal of ensuring our farmers get a decent return for their hard work and consumers have access to affordably-price food, especially rice,” he said in a statement. 

The DA noted that rice prices in the Philippines are lower than those in Thailand and China, both of which are also major rice producers.

As of November 18, DA's monitoring reported that retail prices for well-milled rice in the Philippines range from P45 to P54 per kilo, cheaper than China's P43.88 to P87.75 and Thailand’s P50.90 to P130.08 per kilo.

However, groups challenged this claim, arguing that the proposed P42 per kilo retail price neither guarantees affordability for consumers nor provides adequate support for farmers.

“P42 per kilo of rice is still unaffordable for ordinary Filipinos especially for low-income consumers, marginalized sectors and wage earners,” Kilusang Magbubukid ng Pilipinas Chairperson Danilo Ramos told Philstar.com. 

Concerns over price peg

While P42 may seem high enough for farmers, Bantay Bigas and Amihan stressed that it also depends on farmgate prices, which may be manipulated by traders if not controlled by the government. 

Bantay Bigas spokesperson Cathy Estavillo told Philstar.com that farmgate prices of palay should be at least P20 per kilogram. 

She said that to prevent underpricing from being done by traders, the National Food Authority should directly purchase palay from farmers.  

Citing current palay prices, Estavillo said farmers who harvested in September and October were often forced to sell their palay for as low as P14 to P18 per kilogram.

The Philippine Statistics Authority reported a decline in palay farmgate prices in 2024. The price of fancy, dry palay dropped from P28.66 per kilo in January to P20.71 in October, a decrease of around P8.

Other palay varieties also saw a reduction, with prices falling by about P4 from P24.92 per kilo in January to P20.51 in October.

However, prices vary by region, with some areas seeing even lower prices. For instance, in Calabarzon last month, a kilogram of palay was sold for P18.10. This is P5 less than the P23.55 per kilo in January.

On top of regulating prices, Estavillo said that the government should focus on strengthening the local rice industry instead of relying on importation.

The groups also urged the government to grant farmers P50,000 in financial compensation and subsidies to help them recover from production losses.

For consumers

Women peasants group Amihan, of which Estavillo is the secretary general, said that with the recent typhoons, the government should implement subsidized prices for rice and other basic food items. 

She gave an example, saying that if the government can regulate rice prices by lowering them to P32 per kilogram, it will help bring down the high prices of commercial rice as well.

However, she explained that the issue lies in the fact that the NFA no longer has the authority to regulate rice prices, following the passage of Republic Act 11203, or the Rice Tariffication Law, which removed its power to control both rice imports and prices.

Instead, the NFA is now limited to purchasing locally grown rice and ensuring an adequate supply of domestically produced rice.

Ramos proposed how the country could achieve lower retail rice prices. He said the key is for the government to provide subsidies for palay farmers, the NFA and for rice prices itself. 

The subsidy for farmers will cover the full production costs, while the subsidy for the NFA will be used to procure at least 20% of the total local farm production.

According to DA’s monitoring, local well-milled rice costs around P42 to P53 in Metro Manila markets as of November 18. This is around P1 to P2 lower than last month’s price.