EDITORIAL: The Rice Pricing Issue

In the Philippines an estimated 2.5 million families are involved in marginal rice farming. They are reputed to be the pillars of food security, but 34.3% of them are reportedly to poor.

Rice farming policy is a complicated balancing act involving the interests of rice producers and rice consumers, with rice traders and importers at the fulcrum. The government has created departments and bureaus to address the matter. We have the DA, DAR, national sub-agencies such as the NFA, NIA, farmers training centers, research institutes, and public agricultural schools. They are buoyed with annual budgets for financial and technical assistance to rice farmers.

Republic Act 11203 or the Rice Tarification Law (RTL) was passed in March 5, 2019. The law created the Rice Competitiveness Enhancement Fund (RCEF) to improve the competitiveness of rice farmers, and increase their incomes. The RTL was passed by providing at least P10 billion a year to the RCEF up to 2024. The RTL was also designed to protect the consumers from high prices by lifting quantitative rice importation to fill short supply but increasing demand of rice in the local markets. The law provided that the NFA should focus only emergency buffer stocking that will be sourced solely from local farmers.

The laws seem to be right in harmonizing the interests of stakeholders. But again it fails to recognise development management issues that ills the sector: centralised policy making, shrinking farming areas, unstable production, slow movement of money, social stigma, misplaced government support, non-applicability of supply and demand theory. The hidden fact is that the computation of the production cost does not include the labor of the farmers and their families. Meanwhile the average price of 1kg of white rice in Manila is P52.00, a cause of complaints from consumers. The target of P20/ kilo of rice will be hard to achieve.

In a recent face-to-face workshop with small rice farmers the following problems were articulated related with the RTL and RCEP: bureaucratic system of membership and accreditation, centralized procumbent of farm machineries and supply of farm inputs, traditional bank regulations in accessing loan, little assistance in organizing and capacity building, and farmers’ old system and values.

Questions straight from the horses’ mouth: Can we solve the problems at the farmer’s level? Can our rice farmers be financially self-reliant without depending to bank loans? The farmers suggested the practical solutions: organize rice farmers as simple peoples’ associations to take charge of the milling, storage, buying crops, do the marketing, distribution, related business-like functions, empower farmer groups with the procurement of their own equipment and other inputs under RCEF.

OUR PROPOSAL IS PRACTICAL AND STRATEGIC, BUT NEEDS LEGISLATIVE ACTIONS. INSTEAD OF SUBSIDIES OR AYUDA, THE GOVERNMENT SHOULD PAY THE LABOR COST OF THE FARMERS DURING PRODUCTION PERIOD, WHICH IS NOT INCLUDED IN THE COMPUTATION OF THE COST OF PRODUCTION. FARM POVERTY HAPPENS DURING THIS PERIOD AND SUBSEQUENTLY AFFECTS SOCIAL POLICY MAKING. CAN SOMEONE IN THE LEGISLATURE WHO SINCERELY WANT TO HELP RICE FARMERS WITH INNOVATIONS IN AGRICULTURE ECONOMICS, INITIATE A STUDY ON REAL FARMER-DRIVEN POLICIES?