Rice price may soar up to P40/kg

By Jontahan Mayuga, Cai Ordinario and Bong Garcia
March 27, 2008


http://www.business mirror.com. ph/03272008/ headlines05. html


RICE farmers and members of civil-society groups Wednesday warned that the worst in the country's rice- supply woes is yet to come as they predict the prices of rice will soar to as high as P40 a kilogram (kg) during the lean months of July to September unless the government acts with dispatch to prevent what could be a serious rice crisis.


Jessica Reyes-Cantos, lead convenor of Rice Watch and Action Network (R1), said reports of the tightening global supply of rice have pushed local prices in the market of the country's staple food abnormally high even as the harvest season is still headed for its peak in April.


Worse, peasant leader Jaime Tadeo of the National Rice Farmers Council predicted a rice-production shortfall, considering the devastation brought about by the agricultural drought and super typhoons last year.


This early, he said unscrupulous rice traders are buying palay from farmers at P12/kg to P16/kg, apparently with the intention of manipulating rice supply and price in the lean months.


He said rice farmers are lured to sell their palay to rice traders rather than the National Food Authority (NFA) because of the latter's low buying price of P10/kg. Unless the NFA increases its buying price from its present level to at least P16/kg to P18/kg, it will not be able to buy enough to ensure price stability, he said.


The group said the P1.5-billion augmentation budget allotted by the Department of Agriculture (DA) will not solve the problem, as it will only temporarily feed the hungry during the lean months when hunger and poverty are expected to be felt more severely.


Instead of using the P1.5 billion to distribute food coupons to the poor, the government should use it to increase the buying price of palay to ensure enough supply lasting until the end of the lean months. That way, they said, the rice cartel will not be able to successfully control or manipulate the supply and price of rice in the market.


Moreover, they said, it is high time the government deals with the members of the rice cartels involved in rice supply and price manipulation. One way, Tadeo suggested, was by putting up warehouses in every rice-producing barangay so that farmers could store their palay for long periods of time and sell them to the NFA at a more reasonable price, instead of selling to rice traders. 
With the low buying price of the NFA, Trinidad Domingo, chairman of the Pambansang Koalisyon ng Kababaihan sa Kanayunan and a rice farmer from Nueva Ecija, said traders will be able to manipulate the price of rice in the market.


"The price of rice is expected to go up to as high as P40 by July as the traders will definitely take advantage of the limited supply while the government will be dependent on the imported rice for its buffer stock," Tadeo said.


He said the harvest during the last quarter of the month is good for four months, while this coming season's harvest will last for two months.


Tadeo computed the expected rice supply this harvest season based on the 868,509 hectares of irrigated rice farms that will be delivering the produce this April, while the rain-fed areas or the rice lands without irrigation are expected to harvest only by October or November.


Meanwhile, a former party-list lawmaker urged the government to strengthen its rice-intervention program to stabilize its price.


Former Anakpawis party-list representative Rafael Mariano said the intervention could be through the intensified palay buying by the NFA.


Mariano said the government should increase the budgetary allocation of the NFA to increase its purchase of palay from farmers instead of allocating funds to import rice from other countries.


He said the NFA's intervention should start from the planting of the crop up to its harvest, unlike the present setup wherein "the NFA only intervenes during harvest" by buying the farmers' produce.


This way, he said the rice farmers would not be indebted to the usurers who are traders themselves and who "corner" the bulk of the production, and dictate the rice prices in the markets.


It was learned from the NFA provincial office in Zamboanga City that the agency is buying clean and dry palay from the farmers at P11/kg.


An additional 15 centavos a kilo is paid to farmers who sell palay with 14-percent moisture content; plus a delivery incentive of 10 centavos and 25 centavos for Cooperative Development Incentive Fee (CDIF). However, the farmer could avail himself of the CDIF only if he is a member of a cooperative accredited by the NFA. 


Mariano added that the Agriculture department, which has supervision over the NFA, should provide a credit-subsidy program to rice farmers to prevent them from going to usurers.


He said the government should also increase the budgetary allocation for the irrigation program to make the country rice self-sufficient.


He said the Philippines should do away with importation of rice and instead use the funds for irrigation, noting that only about 800,000 hectares of the total 4 million hectares of rice fields are irrigated.


The country could be 100-percent rice self-sufficient if the entire 4 million hectares of rice fields are fully irrigated, Mariano said. The rice self-sufficiency of the country is only 85 percent to 90 percent, he said.


Meanwhile, Zamboanga Grains Retailers Association president Alex Go attributed the increase in the prices of rice to the continuous oil price hike coupled with the increase in prices of farm inputs, such as insecticides and fertilizers.




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