Declining Prices of Rice: Philippine Local Farmer’s Adversity

President Duterte’s signatory on last Valentine’s Day on the Republic Act No.
11203 (An Act Liberalizing the Importation, Exportation and Trading of Rice, Lifting for the
Purpose the Quantitative Import Restriction on Rice, and for Other Purposes) also known
as the “Rice Tariffication Law”, worries many Filipinos especially our local rice farmers.
This bill is believed as the solution for shortage, high price and inefficient farmers in which
the economic managers blamed the National Food Authority (NFA)’s inefficiency and
overpricing.

Nonetheless, economic problems have emerged as effects of liberalizing rice

imports in the country’s largest agricultural industry. The plummeting rice prices become
the main economic issue in this article after 6 months of implementation of the said bill
albeit 105 million of other Filipinos can benefit. This economic issue causes uproar and
even raising questions to the Department of Agriculture (DA) in which President Duterte’s
chief legal counselor, Salvador Panelo’s statement in behalf of the president, “Duterte’s
position is for the greater interest, for the greater good. The President told them (farmers)
that they may be affected but I’m doing this for the greater good”, explains on why our
president urgently made the big decision involving tradeoffs to address the rice shortage
and increasing rice prices thus we have to take risk and challenge our rice farmers to be
competitive with the government support such as providing easy access financing
program of DA.

Moreover, under macroeconomics, this economic issue deals with the price
stability in our economy which is poorly managed affecting our national production and
other factors. Our local farmers are struggling to compete with the cheap imported rice,
and give to the vast majority of Filipinos the option to buy the staple at a more affordable
price. In fact, rice deflation benefit rice consumers but they hurt the rice producers
especially our local rice farmers and proves more that farmers are our most economically
susceptible workers. According to the economic managers, rice- farming households are
the “net purchasers” or “net consumers” of rice in which they consume more rice than
they produce. Unfortunately, they can only gain small amount of income for they are
forced to decrease the farmgate prices of rice despite their high production cost which
includes oil that is always on a price hike and they will end up losing P75 000 billion in
2019 alone for the palay or unhusked rice they sell in the market if plummeting rice price
continues. In addition, farmgate prices are dropping 2 to 3 times faster than retail rice
prices and may result to many local farmers to refuse to plant rice for their income would
not sustain their families and may stop sending their children to school.

As a result, businesses having byproducts from farming will inevitably feel the
consequences (e.g. millers, biomass construction industry, animal feeds and beer
industry). These effects can be observe as what Jaime Tadeo’s depiction about the bill
as the “engine killer of the economy” since the local markets of municipalities and other
industries are dependent on the rice industry to earn money. In addition, according to a
journalist Tony Katigbak’s introspection, continuous decrease of prices of rice will take a
combined effort of imported rice and locally produced rice to meet the high demand of the
consumers in which our local farmers will have difficulties in meeting the increasing
demand that may result to rice self- insufficiency of our country and become dependent
on the imports.
 Moreover, Katigbak highlighted that the current solution to the rice crisis is to
import more rice and stockpile more locally produced grain at the same time but not as a
long term solution. But according to Panelo, imposing lower tariffs can only take effect for
up to 90 days, or until the rice shortage has been fixed and they need time to study the
stability of prices of rice and the deregulations in other affected industries.

Considering the economic principles, in order to address this poor condition of our
local farmers of having small income amidst the high production cost, we can ease their
adversity through a market for local farmers where middlemen are not necessary and
they will directly sell their local goods in which they can earn income easier. Aside from
implemented support of the government in having the Rice Tariffication Law which is to
directly buy the local goods from our farmers through the NFA to have the buffer stock
they can provide in times of natural disasters in our country, the DA can help the farmers
in promoting their local goods to the rice consumers directly by setting up a market for
them and by encouraging the businesses having byproducts from farming to directly
purchase from the farmers. And if this will be supported, they can allocate a particular
budget for farmers just for the construction of the said market and implement the
maximum and minimum price of rice to avoid the deregulations of pricing.

References:

JC Punongbayan.(2019).”Plummeting rice prices: How will our farmers cope?”. Retrieved

20 Sept 2019 from www.google.com/amp/s/amp.rappler.com/thought-leaders/239392-
analysis-plummeting-riceprices-how-will-our-farmers-cope

A.G. Mogato.(2019). “Duterte open to changes in rice tariffication bill”. Rappler. Retrieved
20 Sept 2019 from www.rappler.com/business/22951-duterte-open-changes-rice-
tariffication-bill

A.G. Mogato.(2019). “Butterfly effect: How rice tariffication bill affects everyone”. Rappler.
Retrieved 20 Sept 2019 from www.rappler.com/newsbreak/iq/223268-how-rice-
tariffication-bill-beyond-industry

“What’s inside the IRR of the Rice Tariffication law?”.Rappler. Retrieved 20 Sept 2019
from www.rappler.com/newsbreak/iq/22730-implementing-rules-regulations-rice-
tariffication-law