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AWMAKERS are keen on
setting a floor price fot rice
to ensure that the farm-gate
price of the staple will not fali
below production cost and cause
planters to incur losses.
However, the National Eco-
nomic and Development Author-
ity (Neda) and local economists
said setting a floor price for rice
is anticompetitive and would de-
feat the purpose'of Republic Act
(RA) 11203, or the rice trade lib-
eralization law.
Tariac Second District Rep. Vic-
tor A, Yap said he will fite a bill
that will set a floor price scheme.
Through this, Yap said both the
government and the private sector
will have a minimum buying price
for unhusked rice.
"In a'liberal or open market,
there will be greed;r players and
there will be speiulation. That's
how capitalists are," Yap said dur-
ing theiHouse Committee on Ag-
riculture and Food hearing on the
implementation of the rice trade
liberalization law on Monday.
"Now we have problems las
farm-gateJ prices are going down
to P9, P10, orevenP6perkilogram.
We could easily address these prob-
lems if
we have a mechanism to,
prevent lprices from going-down
belowproduction cost]," he added.
The lawmaker said he is still
finalizing his proposal, but his
initial assessment shows that the
floor price could be set at P13.50
perkilogram, which maybe cutby
P0. 50 annualiy if production costs
will decline. CurrentlR farmers
spend at least P1"2.7 0per kilogram
to produce a kiio of palay.
Quezon First District Rep.
Wilfrido MarkM. Enverga, chair-
man of the House Committee on
Agriculture and Food, said the
panel could study and refine the
proposal according to current
market situation.
Seg "RrcE," A2
BusinessMfuror
Tuesday, September 3, 2OI9
Rice. o .
Cor.ltINuuo rnouAr
Kilusang Magbubukid ng Pilipinas (KMP)
(hairman Emeritus Rafael Mariano also proposed
during the hearing the passage ofa measure that
would put in place a floor price system.
Mariano, a formeragrarian reform secretary,
said the floor price for rice should not fall t0
below P20 per kg.
"l think it's high time for a floor price for
palay since we do not have a ceiling price for
[milledl rice. Prices of palay plunge but prices
of [milled] rice don't, depending on supply and
demandi he said.
Higher budget
ENVERGA also said he will push for an increase in
thebudgetofthe National Food Authority (NFA) to
enable itto buy more unhusked ricefromfarmers.
"l think we do not ha-ve thlcalability yet
to rompete [under] the current liberalized
rice market. Government intervention is still
necessary for the farmersi he said.
'At least, if they sellto the NFA, farmers are
assured that their produce will be,bought at a
higher pricei Enverga added.
The lawmaker, however, did not indicate the
amount that Congress could set aside forthe NFA.
"The INFA] administrator said it would take
about P3 1 billion to cover all farmers. For now it
willbe betterto get m0re details asto whatwill
be fair for the farmers and for the market. But
what is assured isthatwewill push foran increase
in the budget ofthe NFA for 2020i he said.
Enverga said he will discuss with the
Committee on Appropriations the proposal
to increase the NFA's budget for its palay
procurement program next year.
During the hearing, Mariano urged Congress
to increase the NFA's budget by P10 billion to
Pl5 billion next year so it could purchase more
palay from local farmers.
\ Traotr pAq€u
Ihe additional funds, he said, will enable
the NFA to buy an estimated 2 million metric
tons of rice and allow the food agency to have a
buffer stock level that is good for 30 to 45 days.
0pposition
TH E National Economic and DevelopmentAuthotity
(Neda) and localeconomists rejected the proposalof
setting afloor pricefor rice, saying the move would
defeat the purpose ofRepublic Act (RA) 1 1203.
ln an interview atthe sidelines of the hearing,
Neda Assista nt Secretary. Mercedita A. Sombi I la
told the-BusntssMrnRon that setting a floor price
would be anticompetitive.
Sombilla also said now is notthetimeto impose
specialsafeguard duties (SSG) on rice imports.
"[Ihefl oorprice] is goingtodefeatthepurposeof
the law. Even the SSG, it'stooearlyinthe gamet0 get
that in place. Let's have the law work firsl'she said.
Local economists, such as Philippine lnstitute
for Dtivelopment Studies Senior Research Fellow
Roehlano Briones, told the BusrnrssMrnnon that
setting a fl oor price could also be disadvantageous -
to farmers.
Briones said farmers may not be abletoattract
enough buyers if traders will be compelled to buy
rice from farmers at a minimum price.
"[t would be] better to encourage farmer
organizations to do theirown toll processing to sell
rice to wholesalers, retailers, or even (onsumers
and capture rent in themarketing stagei he said,
0rganizing farmers into cooperatives, Action for
Economic Reforms (AER) President Jessica Reyes-
Cantos told the BurHrssMrnno& wil I also help fa rmers
better cope under the current rice trade regime.
(antos said farmers can organize themselves
and maximize theit production not only of rice
butalso in the use ofcertain fertilizers.This, she
said, is especially crucial now that fertilizer costs
as much as Pl,800.
She said it may even be better for farmers t0
resort to the use of organic fertilizers instead of
buying imported fertilizers that are expensive.
With o reportby Cai U.0rdinario