Farmers foresee worsening rice shortage; prices expected to soar to P40/kilo

March 26, 2008

Farmers and civil society groups warn that the worst situation in the country’s rice supply is yet to come as they predict the prices of rice will soar to as high as P40 during the lean months of July to September.

“Reports of tightening global supply of rice have pushed local prices in the market of the country’s staple food, abnormally high even as the harvest season is still headed for its peak this coming April,” said Jessica Reyes-Cantos, Rice Watch and Action Network Lead Convenor.

In a press conference held today in Quezon City, the farmers predict that based on their estimates, the expected production output this harvest season is 1.9 million metric tons that will last for almost two months.

“The price of rice is expected to go up to as high as P40 by July as the traders will definitely take advantage of the limited supply while the government will be dependent on the imported rice for its buffer stock,” said Jimmy Tadeo, Chairperson of the National Rice Farmers Council.

The farmers reported that the traders’ buying price of palay at present ranges from P12 to 16 per kilo while the National Food Authority is still pegged at P10 per kilo.

“With this lopsided participation of NFA, we will not be surprised if the traders who bring the rice to the market are able to command the prices of this basic commodity and will be able to set the prices when the supply further tightens in July to September,” said Trinidad Domingo, Chairperson of the Pambansang Koalisyon ng Kababaihan sa Kanayunan (PKKK) and a rice farmer from Nueva Ecija.

The farmers computed the expected rice supply this harvest season based on the 868,509 hectares of irrigated land that will be delivering the produce this April. Only the irrigated areas were able to plant late last year up to early this year while the rain-fed areas or the rice lands without irrigation are expected to harvest only around October or November.

According to Tadeo, the national average yield is only 3.5 tons per hectare which will result to around 3 million metric tons of palay output. The milling of palay has only 65% recovery that will lead to 1.9 million metric tons of rice output for the period. According to government figures, the daily consumption of rice is pegged at 33,000 tons.

“Higher buying price of palay will give temporary relief to farmers as they will be able to bring home bigger income. However, they will be forced to buy rice during the lean months of July to September and may not be able to contend with the very high prices of rice,” said Domingo.

Tadeo said the government was not even able to help the farmers cope with the rising cost of petroleum-based farm inputs and even promoted chemical farming instead of training the farmers to be more self-reliant and organic to reduce their production cost.

“We are calling on the farmers to hold on to their palay and leave some for their household consumption so they will not buy rice for their own needs especially in the coming months when the prices will be more unbearable for them,” said Tadeo.

Cantos criticizes the government for failing to improve the production performance of rice and falsely relying on imports to feed the people. “If the government is really sincere in ensuring that affordable rice is available to the poor through the rice coupons, it should buy rice directly from the farmers at prices higher than the traders’ offer to ensure that this program will benefit the poor farmers as well,” Cantos explained.

“All the government officials and so-called free market economists who espoused importation rather than improve the local production should be exposed to shame now that the so-called free flowing international trade is mired by self-imposed export quota of major rice-exporting countries,” added Cantos.

Another farmer from Nueva Ecija, Rene Manabat said the P1.5-billion augmentation budget allotment for the Department of Agriculture (DA) for seed support to increase rice production will be another knee-jerk reaction of a government in panic while trying to scramble for a solution to avoid public outrage.

“A coherent food security policy is in order, anchored on a sound land use policy to avoid more rice lands being converted to subdivisions, golf courses and other recreation facilities. The ongoing crisis that the government refuses to admit, should lead to a comprehensive rice master plan based on self-sufficiency policy, learning from the international rice trading dynamics that we are experiencing now,” said Manabat.

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