MANILA – As the farmgate price of palay continues to plunge in many parts of the country, the government is getting set to arrest this freefall by coming up with a Suggested Retail Price (SRP) on rice.
In a press briefing on Wednesday, Agriculture secretary Emmanuel Piñol said, the need to set SRP became apparent during a meeting held on July 16 between the rice industry stakeholders, the Department of Agriculture (DA), and the Philippine Statistics Authority (PSA), which were called to determine the cause of the drop in the palay prices.
“During the meeting, a lot of inputs were contributed and we saw that there are loopholes in the Rice Tariffication Law (RTL) that needs to be addressed,” he said.
“Masyadong ganadong mag-import yung mga traders right now kasi feeling nila wala ng magko-control sa presyo ng bentahan ng bigas sa palengke. So, napakalaki ng margin ng profit nila,” he noted.
Piñol said the landed cost of rice from Thailand is about P23/kilo, Vietnam is PHP25, and Myanmar is about PHP18. “Pero ang bentahan sa palengke and this was what surprised us mataas pa rin– nasa P40, P50.”
“This alarmed us because this was not the intent of the Rice Tariffication Law. The intent of the RTL was to open the market to lower the price of rice and make it affordable to the consumers,” he stressed.
Piñol added that the implementation of the Rice Tariffication Law will result in a switch from the previous quota system in importing rice to a tariff system, where rice can be imported more freely.
The law allows unlimited rice importation, but investors must first secure a phytosanitary permit from the Bureau of Plant Industry and pay the 35-percent tariff for shipments of Southeast Asia.
This is expected to result in a decline of as much as PHP7 per kilogram in the domestic retail price of rice.
However, farmer leaders and rice industry stakeholders are now complaining as farm gate prices of paddy rice dropped to a record low of P12 to P14 per kilo in many parts of the country.
The prevailing farm gate prices showed a steep drop from an average of P20 per kilo of fresh palay earlier this year which would result in an estimated P114-billion in losses to Filipino rice farmers for the whole year.
In contrast, the market prices of rice, expected to drop by P7 per kilo with the RTL, have remained almost constant with some areas reporting a drop of only P1 to P2 per kilo, even with the deluge of imported rice, the rice industry stakeholders said.
As of March 5, the total number of registered rice importers was 480, and the total number of Sanitary and Phytosanitary Import Clearance issued was 1,607,398.054 metric tons (MT).
As of July 12, the total volume of imported rice that arrived was 822,074.008 MT.
Under the RTL, a special safeguard duty on rice was put in place to protect the rice industry from sudden or extreme price fluctuations.
A safeguard duty is a temporary increase in import duty of an agricultural product to deal with import surges or price falls, under the World Trade Agreement on agriculture.
In a consultation Wednesday which was attended by the Department of Trade and Industry (DTI), National Economic and Development Authority (NEDA), Department of Finance (DOF), and DA, Piñol said they came up with a solution to use the Price Act as the basis in addressing the “uncontrolled” pricing of rice in the market with the purpose of coming up with an SRP.
“We are now drafting a Joint Memorandum Circular with DTI for the implementation of the Price Act,” he said.
Under the provision of the law, the DA chief said, they can deputize or enlist the assistance of any government agency in the implementation of the provisions of the Price Act.
“The DA will also issue a Department Order setting the guidelines for the SRP. The intention of this move is to really make the consumers feel the effect of the Rice Tariffication Law,” he said.
“We will set the SRP based on the landed cost of rice. DTI, NEDA and DOF will come up with the computation,” he added.
Piñol said the SRP for rice might be between P35 to P38 per kilo for premium or 5 percent broken. (PNA)