Tarlac rice farmers, retailers suffering losses due to price cap

Consumers groan from rising prices of rice. —PHOTO BY RAUL BALINGIT

Rice farmers and retailers are incurring heavy losses from the price cap imposed starting on Sept. 5 on regular-milled and well-milled rice even as it brings temporary relief to consumers.

Executive Order No. 39 (EO 39) set the price of regular-milled and well-milled rice at P41 and P45 a kilo, respectively, amid soaring prices of food and other basic commodities. 

Some farmers support the rice price control, according to the Presidential Communications Office, but certain rice farmers in the province of Tarlac beg to differ. 

Edgardo Garcia, a member of the Mayang United Farmers Agriculture Coop (Mufac), said that before EO 39 came into force unmilled rice was selling for P23-25/kilo, and that the price crashed to P17-19/kilo beginning on Sept. 5. 

Retailer Raul Balingit said that if he sold his stock based on the prices set by the executive order, he would have incurred a loss of close to P750,000. 

Garcia said the P4-5/kilo drop in the price of unmilled rice had eaten up his profit. He now barely breaks even, he said, adding: “Fuel prices are high. The profit we get from six months of tending the field is just not enough. What more for a family with a baby that needs to buy milk and diapers at runaway prices?” 

According to Garcia, the situation of his fellow Mufac members has become dire: The series of typhoons that battered farmlands, the unrestrained rise in costs of basic necessities, and the free fall in profits from rice farming have pushed them to sell their lands as they fall deeper in debt.

Cash aid

On Sept. 10, amid complaints from retailers, the government started distributing P15,000 in cash assistance to small rice sellers in Metro Manila. The Department of Trade and Industry (DTI) said the cash aid should be sufficient to help retailers sustain themselves for at least seven days after the implementation of EO 39.

But Balingit told CoverStory.ph that the cash aid did not even come close to covering rice retailers’ expected losses from the price cap.  

“If we sell our old stock at the price ceiling, we lose P205 per sack. We had 3,600 sacks of rice, which meant that we would lose P738,000 of profit,” he said.

To avoid losses, he said, he needed to sell all of his old stocks at a reasonable price before following the price ceiling.  

Even after taking the brunt of the losses, farmers like Garcia are not eligible to avail themselves of the P15,000 subsidy. The DTI said it was only for qualified rice retailers.

And cash assistance to farmers does not appear to be coming anytime soon. 

On Sept. 11 the Presidential Action Center warned the public against believing reports that it would distribute P5,000 in rice and cash aid to farmers. “We want to clarify that this information is entirely false. The Presidential Action Center is not engaged in any such distribution and no such program is currently in operation,” it said in a social media post.

Campaign promise

Retail prices of the staple are now more than double the price that then presidential candidate Ferdinand Marcos Jr. promised voters. 

During the election campaign in 2022, Marcos said the price of rice would eventually reach P20/kilo if he would be elected president. 

It did not happen. Prices smashed past P50/kilo and may even reach P60/kilo, according to Leonardo Montemayor, head of the Federation of Free Farmers and a former agriculture secretary.

The Marcos administration has expressed the hope of cooling down rice prices in the domestic market by implementing price controls while it cracks down on rice hoarders. 

But Balingit believes he can sell regular-milled rice at P41/kilo  and the well-milled grain at P45/kilo because farmers are just now harvesting their crops.  

With or without EO 39, the price of rice will inevitably drop, he said. 

Top importer

Dwindling land devoted to farming, unproductive farming methods, and typhoons, among other factors, have led to the Philippines becoming a perennial importer of rice.

A study by the US Department of Agriculture has projected that the Philippines would displace China as the world’s top rice importer. Per the study, in 2023-2024 the Philippines is expected to buy from abroad 3.8 million metric tons (MT), higher than China’s 3.5 million MT.

The Philippines is increasingly importing rice amid the tightening global supply, which has further pushed prices upward. 

Eat ‘camote’ 

Meanwhile, Health Undersecretary Eric Tayag has suggested that Filipinos eat camote (sweet potato) and corn as not only cheaper but also healthier alternatives to rice.

“The Philippines could impose a rotation on basic food requirements; this was proven the last time,” Tayag said at a press briefing on Sept.  5. “We need to balance our consumption of rice with vegetables that we can buy for a cheaper price.”

In 2022, Iloilo Rep. Janette Garin, a former health secretary, recommended a switch to root-crop alternatives to help ease the rice shortages predicted for this year.

Trade Secretary Alfredo Pascual indicated that as the government decided on its next course of action on rice, the price cap may be lifted soon. “Maybe [in] another two weeks we will have a good idea of the availability of supply,” he said in an interview aired on a cable network. 

Pascual emphasized that the price ceiling was not the only measure that the government was enforcing to curb rice prices. “This was done alongside efforts to address the issue of hoarding, profiteering and cartelization,” he said.

See: Food security? Ease the plight of farmers first

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