Rice Tarrification Law blamed for declining palay prices

Federation of Free Farmers (FFF) blamed the implementation of the Rice Tarrification Law, which allowed unlimited importation of rice for the continuous decline of prices.

Reports said farmgate prices of dropped to between ₱11 per kilogram (/kg) to 13/kg for wet palay and ₱14/kg to 17/kg for dry palay.

As a result, farmers are barely earning since their capital to produce rice is still around P12/kg due to the lack of machinery and relatively high fuel costs.

As for the government, NFA buys from local farmers at ₱19/kg. However, NFA is not capable of buying all the rice the country is producing, its Administrator Judy Dansal said.

FFF projected that prices are expected to decline even more during the peak of harvests in October and November.

“Many traders are playing safe and buying low because imports might flood the market again like last year and make it unprofitable for them to dispose of their stocks. Other traders have decided not to take risks and have reportedly stopped buying for the meantime,” FFF National Manager Raul Montemayor said.

Also read: Philippines to produce less, import more rice in 2020 – report

Rice Tarrification Law blamed for declining prices

Montemayor also blamed the Congress and the Senate for passing the Rice Tariffication Law, which created the problems farmers face now.

He said the Senate version of the law, which was authored by Senator Cynthia Villar, did not remove the volume limits on imports as required by the World Trade Organization (WTO). The Rice Tarrification Law also removed NFA’s direct involvement in the market and removed the agency’s authority to control rice prices in the private sector.

“They have a moral responsibility to promptly rectify any deficiency or omission in the law before these bring more harm to our farmers. They also need to address indications that the benefits of rice trade liberalization have been captured mostly by market intermediaries, while consumers have not benefitted significantly from cheaper rice prices,” Montemayor said.

The FFF also urged for an amendment of the Rice Tarrification Law that will allow for the temporary reinstatement of volume restrictions on imports under certain conditions, which is also authorized by the WTO.