What can be a bigger proof of the existence of price manipulation on rice than the need for the extreme measure of declaring a food security emergency to stabilize the market?
Rice prices had defied whatever measures were thrown on them by the administration of President Ferdinand Marcos Jr. including a cap on prices.
Initially, tariffication was applied to free up the importation of rice. Later on, the tariff was slashed from 35 percent to 15 percent to further encourage rice importation and pull down prices in effect.
Yet, prices of the staple grain remain high.
In a statement, Agriculture Secretary Francisco Tiu-Laurel said that the move for an emergency was prompted by the “extraordinary” rise in local rice prices and came on the recommendation of the National Price Coordinating Council (NPCC).
The declaration is needed to flood the market through the release of rice buffer stocks by the National Food Authority (NFA).
The Department of Agriculture said that it plans to release 300,000 metric tons of rice currently being stockpiled by the National Food Authority at a rate of 30,000 metric tons per month.
Under the law, the NFA is only allowed to release buffer stock when calamity strikes and the reserve supply should last for 15 days.
Rice stocks will be sold to government agencies, local governments, and outlets under the government’s Kadiwa ng Pangulo, or “rice for all,” program to “stabilize rice prices and protect consumers from further price hikes.”
Prices of the staple grain have been on the rise in the Philippines since July 2023 despite the measures applied seeking to cool down prices.
Rice is a lucrative commodity since it is the staple food of the 110 million Filipinos.
Thus, claims that manipulating prices is impossible are rather unbelievable.
The Philippines remains the world’s biggest importer of grain.
According to the Foreign Agricultural Service (FAS) of the US Department of Agriculture, the projected import total of 4.7 million tons this year, which matched last year’s record high, is “spurred in part by high domestic prices and the recent government decision to reduce tariffs.”
Milled rice production is forecast slightly higher than the previous year at 12.7 million tons, the US agency indicated, as the country emerges from the current El Niño weather pattern and government spending on inputs and machinery offsets a slight drop in yields.
“The slight increase in production from 2023-24, however, will still fall well short of demand,” the FAS said.
Whoever controls the local rice industry, thus, influences global trade due to the volume of rice purchases each year.
Most of the supplier of the country comes from Vietnam, as before when the alleged rice cartel had dominated prices.
Early last year, Vietnam agreed to supply the Philippines with an additional 1.5 million to 2 million metric tons of white rice at a “competitive and affordable price” for each of the next five years.
According to the FAS, the country is projected to produce 12.69 million tons of milled rice in 2024-25, while consuming a projected 17.3 million tons, thus importation remains a necessity.
The emergency should be employed against the huge grain warehouses to flush out stocks which was how the earlier problem of surging prices was addressed.