By Jovee Marie N. dela Cruz & Rea Cu
The Magsasaka party-list is calling on the House of Representatives to conduct an immediate review of the implementation of the rice trade liberalization law when the first regular session of Congress opens on Monday.
In House Resolution 21, Party-list Rep. Argel Joseph Cabatbat of Magsasaka said the effect of Republic Act (RA) 11203 must be investigated after planters reported that the average farm-gate price of unhusked price has dropped to P12 per kilogram.
Cabatbat said the aim of the law is to cut the price of rice so it could be affordable for consumers, particularly the poor, but retail prices fell by only a single digit.
He said the average retail price of well-milled rice declined to only P43.10 per kg this year, from P44.12 per kg in 2018 and that of regular-milled rice dropped to only P38.72 per kg this year, from last year’s P40.37 per kg. Prices were reduced by 2 percent and 4 percent, respectively.
“[However], farm-gate prices of fresh palay have dropped dramatically from P17 per kg in 2018 to P12.40 per kg this year, and dry palay from P23 per kg in 2018 to P16.40 per kg this year, a reduction of 37 percent and 29 percent in price, respectively,” he said.
Magsasaka filed the resolution after Agriculture Secretary Emmanuel F. Piñol announced that the average farm-gate price of palay dropped to a record low of P12 per kg to P14 per kg in many parts of the country.
Piñol said the prevailing farm-gate price of palay is 30 percent to 40 percent lower than the average of P20 per kg recorded earlier this year. If this trend continues, Piñol warned that Filipino rice planters could lose an estimated P114 billion for the whole year.
The decline in farm-gate prices, Piñol said, also prompted farmers and other rice industry stakeholders to urge President Duterte to review the loopholes of RA 11203.
The President signed into law RA 11203, or “An Act Liberalizing the Importation, Exportation and Trading of Rice, Lifting for the Purpose the Quantitative Import Restriction on Rice,” on February 14. Implementing rules and regulation of the law was promulgated on March 5, enabling the law’s full implementation.
‘Not needed’
The Department of Finance (DOF) said, however, that the review of RA 11203 is not needed as rice prices have gone down and will decline even further in the coming months.
Finance Secretary Carlos G. Dominguez III announced this via SMS when he was asked whether RA 11203 should be reviewed.
Citing the weekly survey of commodity prices conducted by the Bangko Sentral ng Pilipinas, Dominguez noted that well-milled rice and regular-milled rice were sold at an average of P42.92 per kg and P38.59 per kg, respectively, in June.
“The rice liberalization law is one of the most important legislative achievements of the 17th Congress and the Duterte administration. For Filipino households, lower prices are already a reality,” Dominguez said.
“Prices dropped between P5 and P10 per kilo in some areas since their peak in September last year. On average, contribution of rice to inflation was negative in June 2019,” he added.
In January, the average price of well-milled rice reached P45.09 per kg, while regular-milled rice was priced at P41.41 per kg. In September 2018, well-milled rice was priced at P49.56 per kg, while regular milled rice can be bought for P45.75 per kg, based on government data.
“DTI [Department of Trade and Industry], DA [Department of Agriculture], Neda [National Economic and Development Authority] and DOF have been continuously monitoring import and retail prices to check whether traders are earning fair, and not excessive, profits. We expect that the effects of enhanced competition among importers will be felt even more through additional retail price reductions,” he added.
Fund release
RA 11203 also mandated the set up of the Rice Competitiveness Enhancement Fund (RCEF), which will consist of tariffs collected from shipments of imported rice. The national government had agreed to front-load P10 billion for the RCEF.
The Department of Budget and Management (DBM) told the BusinessMirror that it will release only P5 billion for the RCEF this year as it has released P5 billion to the DA last year. However, the DA said the amount was not part of the RCEF.
RCEF aims to provide farmers tools and equipment, assistance in the production, promotion and distribution of certified rice seeds, upgrading of post-harvest storage facilities, credit assistance, irrigation support, and research and development (R&D) support.
“The DBM confirmed that they released today [Thursday] P5 billion as required by the rice tariffication law,” Dominguez said.
DBM OIC Janet B. Abuel said in a news briefing on Thursday that the agency has released P4.3 billion for the RCEF. She said the agency will release soon the remaining P700 million to the Technical Education and Skills Development Authority.
As for the remaining P5 billion for the RCEF, Abuel said the national government will look into the possibility of granting it, but this will depend on a number of circumstances, including the collections of the Bureau of Customs.
Image credits: Laila d. Austria