Avoid haste in RTL

By Rose de la Cruz

Economists are asking the House not to rush the amendments to the Rice Tariffication Law and the charter of the National Food Authority and instead study the numerous hearings conducted by the upper chamber on this issue.

This in order to not further the complications involving the rice supply and pricing situation just to please some people, they said. The RTL itself was a product of haste in a bid to please the foreign multilateral institutions that wanted NFA out of rice trade and importation and to bestow the same functions entirely on the private sector.

Millers meantime are asking that production cost of palay be cut by one-third if the government wants retail prices to be as low as P30 per kg. (from where it is now at P49 to P53 per kg).

Despite a reduction in the cost of producing rice from P15.24 per kg in 2019 to P13.64 in 2023–as estimated by the Philippine Rice Research Institute– still rice millers are pushing that this has to be cut to P8 per kg. to make the staple more affordable– or to P30 and below as envisioned by the government– for most people.

The millers belonging to the Philippine Confederation of Grains Association (Philcongrains) said.

“If the production cost of palay falls to P8 per kilogram, then the retail price of P30 per kg is possible. It could even go down to below P30 per kilo if production cost reaches P8 per kg,” Philcongrains President Herculano Co Jr. told the BusinessMirror.

“Reducing production cost is possible if fertilizer costs will go down and farmers will use high-yielding or hybrid seeds,” he added.

Speaker Ferdinand Martin Romualdez said the House is keen on amending the rice tariffication law (RTL) as this could cut rice prices to as low as P30 per kg.

“By amending the RTL, we aim to bring about tangible reductions in rice prices, ensuring that Filipino consumers are not unduly burdened by high food costs,” Romualdez said.

“Lowering rice prices to less than P30 is a crucial step towards ensuring food security and economic stability for all,” he added.

“Focusing on domestic rice production is essential, especially if the government wants to reduce the retail prices of the staple,” Co said.

He added that the distribution of postharvest facilities such as dryers and enhancement of rice mills via the Philippine Center for Postharvest Development and Mechanization (PHilMech) will further boost output.

“PhilMech’s initiative to improve rice mills would help increase the milling recovery rate,” he said.

The latest price watch of the Department of Agriculture showed the average weekly price of local commercial rice in the capital region at P49.81 per kilo for regular and P51.63 per kilo for well-milled. The imported commercial varieties are at P49.85 per kg (regular milled) and P52.66 per kg (well-milled).

Amending RTL could cost the government more debts and prevent it from reducing the budget deficit, said local economists.

Speaker Romualdez said the House is committed to expedite plenary debates and attain the approval of the bill to amend the RTL on second reading by tomorrow (Wednesday).

Economists believe that geopolitics which encouraged trade protectionism through the imposition of embargoes necessitated a shift in the country’s rice policy.

“The risk [of amending the RTL] is to create enormous liability for the government, or enlarge the government budget deficit, when NFA [National Food Authority] tries to control the market price. This is based on pre-RTL historical precedent,” said Senior Research Fellow Rhoelano Briones of the Philippine Institute for Development Studies (PIDS) to Business Mirror.

UP Professor Emeritus Epictetus Patalinghug noted that what the country needs right now is a shield against high rice prices in the international market, which NFA could provide.

Patalinghug said the RTL is no longer effective in bringing down rice prices. He insists that RTL “kills the domestic producers” and does not “restrain profit-driven firms from raising prices.”

The NFA’s absence from the local rice market stymied the government’s ability to address nutritional deficiencies such as hunger, malnutrition and starvation, he said.

“Different times call for different solutions. NFA has become useful today as a last-resort rice supplier to the poor, weak, vulnerable, hungry, and malnourished,” Patalinghug continued.

Briones said NFA can finance its rice purchases to intervene in the local rice market through supplemental budgets. If this budget is not enough, the government or even NFA, a state corporation, could itself borrow from various sources.

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