Rice tariff law wreaking havoc on farmers

/ 05:00 AM July 11, 2019

Mr. Ernesto Ordoñez’s article, “Rice farmers in grave danger,” (Agriwatch, 6/26/19) hit the nail right on the head.  My visit to Central Luzon confirmed it.

With the rice tariffication law, which has seen the abdication by  government officials of the governance of the rice industry in favor of profit-motive private traders, there has been a drastic lowering of palay prices. The steep drop in palay prices is a prelude to the eventual demise of the rice farming industry, a direct result of the P19-billion loss in its annual revenue, based on a P1 drop in the price of palay on  19 million metric tons of annual palay production. A low estimate of a P6 average drop in palay price alone means P114 billion in annual losses to farmers.


The P10-billion annual rice fund set aside for assistance to farmers  under the new law will not reach many of them in far-flung areas. Besides, it is a drop in the bucket compared to their needs and staggering loss in revenue.

What they need most is the National Food Authority’s (NFA) help in stabilizing palay prices through its palay procurement program from farmers at P17 to P18 per kilo.


But this help has been taken away from them under the new law. The NFA now buys mainly from traders the traditionally required minimum inventory and no more. With the loss of the NFA as the farmers’ alternative palay market, they have no choice but to sell to traders, who now buy from them at rock-bottom prices.

The traders buy the farmers’ palay produce at P9 to P12 per kilo, quickly turn around and sell the same to the NFA at P17 to P18 per kilo, then laugh all the way to the bank.

Without any government intervention in the rice industry, and with the NFA no longer able to protect farmers, private rice traders are now free to underprice farmers and overprice consumers. They can do this with immorally low prices for palay and unconscionably high prices for rice— b    ecause the free market has no moral dimension. Whatever the market will pay is valid in the free market.

Sadly, this unfair economic system is the unintended consequence of the rice tariffication law.


San Miguel, Bulacan

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TAGS: farmers, Inquirer letters, Marcelo L. Tecson, rice prices, rice tariffication
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