Expensive P20 rice

Expensive P20 rice | Daily Tribune

Filipino farmers are on a path to extinction due to the lack of government support, while the focus is on the populist move to distribute rice priced at P20 per kilo.

A DAILY TRIBUNE interview with agricultural stakeholders revealed a dire situation for tillers who are forced to sell their palay harvests at a loss due to the decline in the buying price for grains.

Palay prices in some rice provinces in Central and Northern Luzon have plunged to as low as P8 per kilo, resulting in a palay glut. Record-low offers to farmers were also recorded in Nueva Ecija and Bicol. Most palay has already been harvested, and some areas have started replanting.

Local farmers are suffering from competition from imports due to the Rice Tariffication Law (RTL), which threw open the market to grains from other nations. At P8 to P15 per kilo farmgate prices for palay, farming becomes unsustainable.

Particularly vulnerable are the small farmers who are not members of cooperatives and are at the mercy of traders.

The RTL’s Rice Competitiveness Enhancement Fund, which is derived from tariffs, finances projects that primarily provide equipment and seeds. However, small-scale farmers who do not belong to cooperatives are excluded from the benefits.

The small farmers, the head of an agricultural group recounted, held on to their harvests in the hope that prices would improve, but instead of rising, prices fell even further.

The spread of the P20 per kilo rice has pressured traders to reduce prices, which has resulted in further lowering the price offered for palay.

“Traders are now pressured to match those low prices, so they buy palay from farmers at even cheaper rates,” according to the head of the sectoral organization.

The National Food Authority (NFA), which is mandated to intervene to stabilize the market, has not been performing its task effectively as it buys clean and dry palay at P24 per kilo.

Most farmers, however, lack the necessary equipment, such as dryers and blowers, to clean their palay. Thus, they are forced to part with their harvest for P8 to P12 per kilo, which is a huge loss.

“Will anyone still plant? Will you let yourself go bankrupt by spending P50,000 per hectare?” asked another representative of a farmers’ group.

The NFA has had little impact on improving the situation. A farmer said the NFA is not active in the market. Most of those who wait for the NFA to buy their produce are left with their palay, which becomes infested with weevils.

Thus, a new problem arises for farmers since the NFA won’t accept infested palay unless it’s treated, which takes 10 to 15 days.

The NFA buys at P24 per kilo, but it accounts for less than 10 percent of total palay procurement.

“If you buy palay at P24 and sell rice at P20, that’s not viable. And if private traders are forced to compete with P20 rice, they’ll naturally buy cheaper from farmers. That’s how farmgate prices collapse,” according to a sectoral leader.

With 2.4-million Filipino rice farmers, many of whom live in poverty, the collapse of farmgate prices risks driving them out of the industry.

What will happen next is that the country will be dependent on imported grains, creating a vicious cycle where the government loses control over prices that will rise uncontrollably due to the increasing need to feed the people.