Add’l initiatives needed to boost rice industry’s competitiveness

The Rice Tariffication Law (RTL) needs other initiatives such as the Department of Agriculture’s (DA) Rice Roadmap to further boost competitiveness and supply issues of the rice farming sector.

 

During a webinar featuring discussions on the law on Thursday, Acting Socioeconomic Planning Secretary Karl Kendrick Chua said DA’s Rice Roadmap has a comprehensive list of interventions and timeframe that will help the rice industry in the shift towards a more productive and competitive sector.

 

“This Roadmap is not just for the Department of Agriculture to implement. It is also crucial for all farmers and all those in the supply chain to modernize and innovate to achieve the competitive rice industry which we have long yearned for,” he said.

 

RTL, which took effect in March 2019, ended the quota system on rice importation to ensure sufficient rice supply in the country but put an additional levy on imported rice.

 

Chua said before the RTL, about 90 percent of domestic rice requirements are provided by local farmers “but this has come at a very high cost to consumers, taxpayers, workers, children, the poor, and (the) rice farmers themselves.”

 

RTL is a game-changer for the 110 million consumers, 2 million of whom are farmers, he said.

 

Citing National Food Authority (NFA) data, he said there are about 70,000 rice retailers and wholesalers, 7,000 millers, and many more are involved in warehousing and transport.

 

“Rice tariffication is a game-changer and benefits all these groups. It (the benefits) may not be immediate, like any reform, but they are clearly starting to show,” he said.

 

Chua said shocks from RTL implementation were experienced such as the drop in farm gate price of dry palay (rice) from PHP21 per kilo at the height of the rice crisis in 2018 to about PHP16.30 per kilo between March and October 2019.

 

He, however, said that farm gate rice prices slowly rose from November 2019 following the implementation of government interventions to support local farmers during the transition period.

 

This resulted in, among others, the rise of farm gate price to around PHP18.25 per kilo in August 2020, which is higher than the average farm gate price of about PHP17.66 a kilo between 2015-17, he said.

 

“This emerging trend indicates that farm gate prices will not fall below the production cost of PHP12 per kilo, contrary to some claims and projections. Besides that, the average production cost estimate is outdated and measured way back in 2013,” he said.

 

Chua also said that because of the production support “highly competitive farmers can bring down the production cost to as low as PHP5-6 per kilo, or roughly the same cost that our neighbors are able to produce at.”

 

Aside from making local rice farmers competitive, Chua said RTL also helps the government in its poverty reduction goals.

 

“This is because rice consumption accounts for around 30 percent of the total food expenditure of the poor,” he said.

 

He said rice is among the top 10 commodities that contributed to the faster rate of price increases in the country from 2018 until early 2019 but it is now out of the top 10 since April last year when rice prices started to drop.

 

“The Rice Tariffication Law is one of our insurance against his Covid-19 pandemic. With the ECQ (enhanced community quarantine) shutting down 75 percent of the economy and affecting jobs and income in a massive way, lower rice prices have helped low-income families cope, tempering the rise in hunger and malnutrition. Without RTL during ECQ, it would have been much worse,” he added.

 

Source: Philippines News Agency

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