DA junks study on rice price cap

Agriculture chief says controlling prices counterproductive, may lead to hoarding

The Department of Agriculture has backtracked on its earlier pronouncement that it was studying the imposition of a suggested retail price on rice amid soaring prices of grain that hit 19.6 percent in December, the highest in 14 years.

“We’re not doing it,” Agriculture secretary Francisco Tiu Laurel Jr. said, noting that such a move would be “counterproductive.”

“Prices of rice and other agricultural products in international markets like Thailand and other countries are volatile and fluctuating due to El Niño. Hence, we’re not suggesting to control prices at the moment,” he added.

DA spokesperson Arnel De Mesa earlier this week said the department was studying the imposition of an SRP on rice.

De Mesa said then that the government will meet with farmers, millers,wholesalers, importers and traders soon to determine if it should impose an SRP on regular and well-milled rice.

Tiu Laurel, however, said “earlier proposals” for an SRP was “just an idea” based on available remedies according to Republic Act No. 7581 or the Price Act.

“In most cases, farmers bear the brunt of a price limit because traders will only lower their purchase prices to keep their margins.

Consumers also don’t benefit in such a situation. It could also fuel price speculation and supply hoarding that evolves into another problem altogether,” he said.

International prices of rice are fluctuating as countries try to increase their grain reserves through importation amid concerns of a potential drop in harvest due to the expected strong El Niño episode.

Tiu Laurel said the DA is working double time to ensure ample supply of farm products, particularly rice, in the face of a potential prolonged dry spell while taking steps to mitigate the weather phenomenon’s impact on local production.

Reports from the National Irrigation Administration’s (NIA) Upper Pampanga Integrated Irrigation System (UPIIS), which provides water to farms in major rice producing provinces of Nueva Ecija, Bulacan and Pampanga, showed sufficient water supply that could sustain strong rice output.

“We’re building up a buffer, largely through importation, to ensure we have ample supply of rice as we await the next harvest starting March.

This should help keep prices stable without government intervention,” Tiu Laurel said.

Rice retailers earlier asked the DA to allow them some level of profitability amid its earlier announcement that its is studying the imposition of an SRP.

The Philippine Rice Industry Stakeholders Movement (PRISM) said rice producers and retailers must also be protected even as they are supportive of plans to put a cap on rice prices.

“While we see this as a normal inflationary adjustment in the pricing of goods and commodities, we expect the government to have some sensitivity to the plight of retailers and rice producers,” said PRISM co-founder Orlando Manuntag.

He said the group intends to push for P48 to P50/kg SRP on regular milled rice, P51 to P55/kg for well-milled rice and P56 to P60/kg for premium varieties.

Please enable JavaScript to view the comments powered by Disqus.