Palay farmgate price drops by P5/kilo

MANILA, Philippines — The farmgate price of palay has gone down by P5 per kilo amid the issuance of Executive Order 62, which lowers the tariff on imported rice, former agriculture secretary Leonardo Montemayor said yesterday, as he projected a further slump in the buying price of the staple during the main harvest season in the last quarter of the year.

“Unless the government suspends or repeals EO 62, it will be very difficult because right now, we have been receiving reports that the farmgate prices of palay have already dropped by at least P5 per kilo, and that will be expected to drop further, especially when we have the main harvest toward the last quarter of this year,” Montemayor said.

Farmers’ groups have asked the Supreme Court to issue a temporary restraining order (TRO) against EO 62 allowing a reduced tariff of 15 percent on imported rice, as they asked that the order be declared null and void and unconstitutional.

“The farmgate price of palay has been going down and the collection of the Bureau of Customs (BOC) has been decreasing, brought by EO 62. In the end, aside from the difficulty of farmers to cope with lower prices of palay, the lower tariff rates will not be felt in terms of lower prices of rice for our consumers,” Montemayor said.

With the P5 drop in the farmgate price of palay, farmers are suffering losses, according to the former agriculture chief.

“The farmers are earning less than the minimum wage. If the minimum wage in Metro Manila is P650 per day, in rural areas, it’s only half. It’s hardly enough for most farmers to cope up with their daily subsistence requirement,” he said.

He added that aside from the impact of EO 62, farmers are also being threatened by the possible impact of La Niña.

“Right now, we have heard very little about what is being done to prepare our sector for the likely effect of La Niña phenomenon and then there is the man-made calamity. I am referring to the tariff cuts brought about by EO 62, so the farmers will be hit by double whammy, a man-made calamity in the form of tariff cut in imported rice and to be followed by natural calamity called La Niña,” Montemayor said.

The 26-page petition was filed by the Samahang Industriya ng Agrikultura, Federation of Free Farmers, United Broiler Raisers Association, Sorosoro Ibaba Development Cooperative and Magsasaka party-list president Argel Joseph Cabatbat.

Named respondents were President Marcos, Executive Secretary Lucas Bersamin, National Economic and Development Secretary Arsenio Balisacan and Tariff Commission Chairperson Marilou Mendoza.

The petitioners noted that farmers were “shocked” that Bersamin signed EO 62, also known as “Modifying the Nomenclature and Rates of Import Duty on Various Products,” last June 20.

The petitioners said they were never informed nor were they ever called for investigation about the reduction of rice tariff.

For the petitioners, EO 62 was hastily issued without consultation, investigation, hearings and reports, which are required by the Republic Act 10863 or the Flexible Clause of Customs Modernization and Tariff Act to be complied with before the President can validly make issuance of an executive order involving tariff reduction.

For his part, Finance Secretary Ralph Recto does not expect the SC to issue a TRO against EO 62, saying there is no reason for the high court to be involved in such matter.

“I do not think there is a reason for the courts to get involved in that,” Recto told reporters on the sidelines of the Economic Journalists Association of the Philippines-San Miguel Corp. economic forum yesterday.

Recto’s response came on the heels of the filing of the petition before the SC by various farmers’ groups to halt the implementation of the EO 62.

The finance chief said the tariff cut would pull down retail rice prices to between P44.17 and P49.56 per kilo by December.

The current average price for imported well-milled rice is P53.45 per kilo while its locally produced counterpart averages P51.25 per kilo.

Recto said the BOC would issue the corresponding memorandum circular of EO 62. The BOC usually issues a counterpart circular for any tariff adjustments or modifications in order for such measures to take effect.

He added that he would meet with the BOC today and would ask Customs officials about the status of the memorandum circular. — Jasper Emmanuel Arcalas