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MANILA, Philippines—Lowering the price of rice to 20 pesos a kilo was one of the promises that helped President Ferdinand Marcos Jr. win the election, but a year later grain is almost out of reach, especially for the poorest of the poor.
Dr. Teodoro Mendoza, retired professor of crop science at the University of the Philippines-Los Baños, pointed to what the Asian Development Bank said in 2008, when rice cost just P32.71 per kilo , that “the era of cheap food is over.”
About 20 years ago, based on data from the Philippine Rice Research Institute, well-milled rice cost only P19.98, but now a kilo is already P40-52P, while that the price of special and premium rice is even higher at P60 and P56.
GRAPHIC: Ed Lustan
According to a Reuters report, the retail price of cereals, whether imported or locally produced, has risen 4% to 14% this month and that the steady rise has triggered local rice inflation at 4, 2% in July, the fastest pace since 2019. .
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Mendoza, however, said INVESTIGATOR.net via FB Messenger that the rice must be sold at a higher price because the play produced by local farmers should be purchased at a price reasonable enough that they are not left behind.
He said the farm gate price for the harvest should be 25 pesos per kilo, so that Filipinos who cultivate their land are not discouraged from producing the grain, which is a staple food in the Philippines.
Too expensive?
But the P25, proposed by Mendoza, would raise the price of rice to P50, so why does a kilo of grain now reach as high as P60 for local special commercial rice and P65 for imported special commercial rice?
Some have pointed out that this is mainly due to the lack of supply, pointing out that the lean months and India’s ban on the export of non-basmati white rice are triggering a spike in the price of cereals, whether imported or produced locally.
The Philippine Chamber of Agriculture and Food Inc. said rice from Vietnam is now 30-32 pesos per kilo, higher than the previous 23-24 pesos. Regarding local rice, the Kilusang Magbubukid ng Pilipinas said there were reports that play is purchased for P34 to P36.
Jomar Gaon, a 52-year-old farmer, said INVESTIGATOR.net via a telephone call that the farm gate price for play harvested in the last weeks of the lean months is very high, but not as high as P34 to P36.
The Bantay Bigas Group pointed out that since the government mainly relied on import without increasing the play purchases from the National Food Authority (NFA), “everything went to private traders”.
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As previously reported by Mendoza, NFA’s purchase price was only P19, too low compared to private traders’ P21 to P23 per kilo. With that, the choice local farmers made was clear, he said.
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Cost stabilization
While local farmers are expected to start harvesting their crops by the end of next month or in the first weeks of October, the price of rice is also expected to drop, but should that really be the case?
As Mendoza said, local producers still deserve to earn a fair and reasonable income from their yields, pointing out that “a sudden drop in farm gate prices to drive down retail rice prices will be an injustice to them” .
Based on data from the Philippine Statistics Authority (PSA), the farmgate price of rice was 19.23 PPP in January, 19.38 PPP in February, 20.15 PPP in March, 21.25 PPP in April, 21.32 PPP in May and then P22.66 in June.
Mendoza said that to encourage farmers to continue plowing their land the government should work on a better farmgate price which is P25 per kilo, saying that with this a farmer can earn a net of 60,000 P for a harvest of five to six metric tons per hectare.
This, as he pointed out that the cost of producing grain is also increasing. Local farmers, he said, should be able to have something to spend on producing play and sufficient income to support their families.
Based on data provided by Mendoza, the cost of production of inbred varieties, like Rc222, which are planted 20 centimeters by 20 centimeters apart, is already P73,003.
If crops were still bought for as little as P19 by the NFA, local farmers would be left with nothing.
Cheap rice for the poor
As the Department of Agriculture (DA) has previously pointed out, as a general rule, the retail price of rice is at least double the farm gate price of play produced by local farmers, so in this case a purchase price of P25 would translate to a retail price of P50.
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“It’s very much within the reach of the wealthy and even the middle class,” Mendoza said, noting that “if they can spend on charging (prepaid or postpaid), they can definitely have something to spend on food. , especially in rice too.”
It was previously stated by the DA that “if the farm gate price (of play) increases, it will result in a higher selling price (for rice),” but Mendoza said the government should also consider the welfare of local farmers.
GRAPHIC: Ed Lustan
Based on PSA data, in 2020 the highest farm gate price was PPP 20.73 per kilo in July, while the lowest was PPP 17.43 in November. This resulted in a retail price of P42.23 and P41.13.
Now, to make rice cheap for the poorest of the poor, Mendoza said the rice pricing law, which was signed in 2019, should be revised to allow the NFA to increase its supply from 30 to 60, even 90 or 100 days.
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But an amendment or repeal of the law, he said, should also be accompanied by an increase in the agency’s budget. In retrospect, the farmers had proposed a budget of 50 billion pesos for the NFA.
impossible reality
Mendoza said “people are in a state of denial”, pointing out that food, especially rice, is becoming more and more expensive because “the cost of production is also high and we cannot leave the farmers behind. “.
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He pointed out that soaring prices should have been no problem if wages held up, especially with inflation.
As the Ibon Foundation think tank stated, real wages and family incomes are clearly failing.
He said that even in Metro Manila, where the minimum wage was increased last month, the current nominal wage of 610 pesos is 47.6% lower than the family living wage of 1,164 pesos for a family of five persons.
The real value of the nominal wage is only 515 pesos in June 2023, which is still lower than its value of 520 pesos when the closings began in March 2020.
“Lack of decent means of subsistence and income worsens poverty,” said the Ibon Foundation.
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