MANILA -- Agriculture Secretary Emmanuel "Manny" Piñol clarified that the fall in the buying price of rice by commercial traders is the result of speculation, which was fueled by the anticipated "flooding" of the market with cheap imported rice under a liberalized market.
This is in view of the disinformation surrounding the newly-enacted Rice Tariffication Law's effect on the local rice industry, to the point that the buying price of palay has dropped from a high of PHP22 per kilo last year to PHP14 and PHP15 in some parts of the country now.
Piñol said the Rice Tariffication Law has just been signed by President Rodrigo Duterte and is not effective yet.
"There is a period within which the public will be notified and the Implementing Rules and Regulations (IRR) still have to be finalized," he explained.
And even if the importers would want to bring in huge volumes of imported rice, the DA chief said there is not much rice supply available in the world market.
"As it is now, the volume of rice traded in the world market every year is only about 40-million metric tons (MT) of which about 38-million (MT) is already committed to specific non-rice producing countries," he said.
"The world population is growing exponentially while the land area is constant and this is true with rice exporting countries like Thailand, Vietnam, Cambodia, Pakistan and Myanmar," he added.
The DA chief said a few years from now, Thailand and Vietnam will not be able to export the same volume of rice as they do today because they also have growing populations.
"The Philippines cannot let go of its own Rice Production Program because the moment it becomes dependent on imported rice, even on a short term, it will end up at the mercy of the rice exporters who could sell their produce at an even higher price than our domestic cost of production," he noted.
Piñol said that the view that some economists are peddling that the Philippines would be better off just importing rice rather than producing it locally is "a short-sighted perspective".
"If this view prevails, the Philippines will face a real rice crisis a few years from now with sky-high prices which the poor cannot afford," he said.
Piñol, however, admitted that initially, there would be a drop in the buying price of palay "but the farmers are expected to adjust by increasing productivity with funds coming from tariffication."
Under the Rice Tariffication Law, a provision states that the tariffs and duties collected from the rice importation -- 35 percent for ASEAN members and 50 percent for other sources -- shall be turned over to the Rice Competitiveness Enhancement Fund (RCEF), estimated at no less than PHP10-billion annually.
For 2019, Piñol said about PHP5 billion of the PHP10-billion RCEF will be allocated for farm mechanization; PHP3-billion for high-yielding seeds; PHP1-billion for credit; and PHP1-billion for technical skills training.
"Properly used, the RCEF could actually increase the productivity of Filipino rice farmers because farm mechanization alone will increase production efficiency and reduce post-harvest losses estimated at 16 percent of total production," he said.
The DA chief explained that the PHP3-billion intended for high-yielding seeds developed by the International Rice Research Institute (IRRI) and Philippine Rice Research Institute (PhilRice) is also expected to increase average farm yield by at least two MT in one-million hectares for the first year of implementation.
On the other hand, the PHP1-billion credit facility will also allow farmers to buy fertilizers and other farm inputs, thus increasing their productivity, while the P1-B for technical skills training is expected to improve their farming technology, he said.
Piñol also stressed that he is supporting the lifting of the Quantitative Restrictions (QR) on rice importation.
He reiterated that the Rice Tariffication Law was the commitment of the Philippines to the World Trade Organization WTO) negotiations many years ago "and these are commitments that we must honor or else we will face trade disputes from other WTO member countries."
"Of course, I have to admit that I had my reservations on the provisions of the law, which takes out the regulatory powers of the National Food Authority (NFA), but these are now settled with the signing of the bill into law. I am a government worker and I will abide by the policy set by the administration and work to ensure its successful implementation," he added. (PNA)
