Rice, corn mills close shop in over 1,000 barangays

MANILA, Philippines — Small-scale rice and corn millers in over 1,000 barangays closed shop in a span of a decade after they were dominated by bigger players amid the influx of cheaper imported grain supplies.

The Philippine Statistics Authority (PSA) reported that in 2023, there were 15,436 barangays with rice and corn mills, 6.3 percent lower than the 16,476 barangays recorded in 2013.

The figures were part of the PSA’s Census of Agricultural and Fisheries Availability of Agricultural, Aquaculture and Fisheries Machinery, Equipment and Services in Barangays, which was conducted in 2022, 10 years after the previous census.

The easing of import rules through the deregulation of the rice industry allowed the entry of more affordable foreign grain supplies, resulting in a stiffer competition in the domestic milling industry, according to the Philippine Chamber of Agriculture and Food Inc. (PCAFI).

This competition, PCAFI president Danilo Fausto said, led to big players in the rice milling industry to command buying prices and siphon off more locally produced supplies, to the detriment of smaller mills.

This has been evident in the dwindling share of locally produced rice in the country’s annual stocks, Fausto said.

The country’s rice import dependency ratio (IDR) rose to 23 percent in 2022 from just 8.1 percent in 2012, based on PSA data. This means that 23 percent of the country’s total rice supply in 2022 was imported.

“The lowering of tariffs incentivizes people to import. Since rice millers will not import a lot because it will kill their companies, they will try to buy more from the local market,” Fausto told The STAR.

“And when they do siphon the market supplies, it is the small millers that die,” he added.

Fausto warned that more small-scale rice and corn mills may shut down in the coming years after the government further cut tariffs on rice and corn. Last year, President Marcos slashed rice tariffs to a historic low of 15 percent while tariffs on corn imports were retained at five percent for in-quota and 15 percent for out-quota until 2028.

At the end of 2022, PSA data showed that 12,376 barangays nationwide had available rice mills while 4,578 barangays had an existing corn mill.

Thresher was the most available farm machinery nationwide as it was present in at least 19,583 barangays, the PSA reported.

Meanwhile, pasteurizer used in milk or juice processing was the scarcest machinery or equipment nationwide. It was found only in 511 barangays or 1.2 percent of the 42,020 barangays covered by the census, PSA said.