Picture a speeding train (rice crisis), and here we are paralyzed in the middle of the rail tracks unable to do anything to save ourselves. My friend Ermin Garcia, Jr. posted on his Facebook page: “What’s happening inside the Department of Agriculture? Who’s running its affairs? Who’s dictating?”
Then Ermin posted this timeline from newspaper headlines to tell the story of inaction or confusion or both.
June 16 – PBBM: We need to import rice; June 28 – DA: Phl has sufficient rice supply till Q3 of 2023; June 30 – DA says Phl needs to import more rice, sugar; July 24 – Marcos warns agri smugglers, hoarders: Your days are numbered; July 29 – Philippines must import rice as El Niño looms, may look to India: President Marcos; Aug. 9 – Phl rice supply to last even after El Niño: PBBM; Aug. 12 – Rice industry group: 300,000 MT imported rice to arrive August-September.
But there is a problem with our rice importations. A reliable rice industry source told me that because imported rice is now at $700/MT, suppliers cancelled the contracts of our traders because they only paid down payment for contracts at $500/MT. No wonder our traders want the RTL amended to provide sanctions for rice exporters we buy from who do not honor contracts, as if we can control foreign rice suppliers.
Reuters quotes two trade sources in Singapore that Vietnamese exporters have renegotiated higher prices for around half a million metric tons of rice as global prices climbed to 15-year highs. Importers, including Indonesia and the Philippines, have reportedly paid between $30 and $80 a ton above deals signed at around $550 a ton for fragrant Vietnamese rice, the Singapore-based traders said. This is why our government must suspend the 35 percent tariff on imported rice to enable local rice traders to recover the additional unforeseen import costs.
In the meantime, an authoritative source told me that palay (unhusked rice) is now selling at P35 a kilo, up from P23 a week ago. A news story also quotes a rice trader saying that many of his colleagues in the grain industry have stopped buying palay at P33 to P34 per kilo since this is increasing wholesale rice prices to P52 per kilo plus the mark-up prices of the retailers.
An increase in farmgate prices should be expected because of declining stocks. Also, it is fair to compensate farmers for higher cost of inputs like fertilizers.
In the meantime, our government officials seem to be “staring at the abyss and no one knows what to do,” my source observed.
I continued the timeline posted by Ermin to show where we are now.
Aug. 15 – Traders stop buying palay; Aug. 16 – Rice prices surge to P56 per kilo; Aug. 18 - Bongbong Marcos: High farmgate costs, importation hiking rice price; Aug. 18 – Marcos optimistic about rice price stabilization as harvest starts…
Ano ba talaga, kuya?
In a statement released by the Palace on Friday, Aug. 18, Marcos said the price of rice would only become steady if the country had increased supplies and reserves. That’s a motherhood statement. He also blamed agricultural hoarders for the high prices of food products and ordered the Department of Justice and National Bureau of Investigation to go after them.
That should have been done long ago. But better late than never if ever that happens and not just a press release.
The President also ordered the DA and the Department of Trade and Industry to closely monitor rice prices. While monitoring should be done, it is not enough. What will the government do after monitoring shows rapidly escalating rice prices?
“What we are watching is the farmgate price because that is causing the increase now, and also the importation of other inputs, including rice itself. So, I think that when our supply increases and our reserve increases, our price will stabilize,” the President said.
What PBBM is apparently saying is that if supply increases – more harvest – the price of palay will fall. That goes without saying. It is a do-nothing strategy, just watching and waiting, and monitoring amidst a looming serious rice crisis. Bahala na si Batman?
Then the President offers a ray of hope.
He said he received reports that rice harvest had already started in Nueva Ecija, Isabela, and North Cotabato – which, he noted, should expand the country’s supplies. But DA deputy spokesman Rex Estoperez was quoted as saying that rice prices have been affected as harvest season is over and won’t begin until October.
So, which is which? Has the rice harvest started or is it over? The DA spokesman can’t even support the good news of the President. The DA spokesman should be gagged.
DA Usec. Leo Sebastian to the rescue with authoritative information. He reported that the initial harvest of palay from Nueva Ecija and North Cotabato is estimated to yield approximately 900,000 metric tons. The initial harvest will continue until September. Sebastian explained that farmers in the main rice-growing areas started planting earlier in May, putting them ahead in terms of harvest timing compared to other regions.
“Palay harvest will peak in late September to October, contributing largely to the country’s second semester (July to December) production, estimated at more than 11 million metric tons (MMT),” Sebastian said.
“Barring strong typhoons in the coming months that may adversely affect Central and Northern Luzon, we are aiming to harvest up to 11.5 MMT in the second semester of the year. This would breach the 20-million MT total national palay production, making it a record, being the highest in the country’s history,” he added.
Where do we go from here?
The President said he is in favor of reviewing the RTL. That’s a knee jerk reaction in a crisis. Blame the law rather than the inadequate implementation of the law. The RTL, if better and more creatively implemented, could address the supply and price problems at hand.
We can’t go back to the bad old days of NFA’s bloated budget going into the pockets of unscrupulous traders and bureaucrats. RTL is still the better way.
Boo Chanco’s email address is bchanco@gmail.com. Follow him on X (Twitter) @boochanco