• DTI eyes subsidies for small retailers
• Speaker: Govt seeks win-win solution
The price ceilings on rice that will take effect Sept. 5 will not only help lower prices but also combat hoarding, profiteering and smuggling, the National Economic and Development Authority (NEDA) said over the weekend.
“We are facing difficult times,” NEDA said in a statement, noting that the extreme weather conditions brought about by the El Niño phenomenon are likely to take a heavy toll on agriculture, particularly rice.
Moreover, it said the trade-restricting protectionist behavior such as India’s ban on exports of non-basmati rice to keep prices low at home, and the aggressive buying by rice-importing countries have reduced the volume of the grain being traded in the global market.
“The government’s priority amid this situation is to ensure that the country has an ample supply of affordable rice,” the agency said.
NEDA said the country has enough supply for the third quarter, and with the harvest season starting in September and import orders already secure, there will be enough rice for the rest of the year.
“That said, we note that the price of rice has been sharply increasing over the past weeks, which is inconsistent with the apparent supply and demand situation. This implies that some are manipulating the expected impact of [the El Niño ] to depict a shortage at this time,” it said.
NEDA said the imposition of a price ceiling on rice will address this issue in two ways: it will immediately reduce the price of rice, and it penalizes and consequently discourages hoarding, further decreasing the price of rice.
“The imposition of a price ceiling on rice is not a standalone initiative. Law enforcement authorities continue their valiant efforts to crack down on individuals who hoard, excessively profit from, smuggle, or participate in rice cartels,” it said.
The Rice Competitiveness Enhancement Fund continues to support farmers nationwide, enhancing their livelihoods and capacity to produce the rice Filipinos need, it added.
Meanwhile, the Department of Trade and Industry (DTI) is considering subsidies and other ways to help small businesses that will be affected by the price ceiling on rice.
Trade Assistant Secretary Agaton Uvero told CNN Philippines an assistance program is “in the works” to help keep small traders and retailers afloat until rice prices stabilize.
At the same time, Uvero urged small businesses to “sacrifice” for the benefit of consumers, saying they have likely reaped windfall profits due to the previous price increases.
“The government is asking for retailers to sacrifice and also help the majority of Filipinos,” he said in Filipino.
Speaker Martin Romualdez, meanwhile, said he will continue to speak with leaders of rice retailers, who complained that they’d be selling their rice at a loss, since they paid high prices to traders.
“The government is not numb. We want to listen to their concerns,” he said. “But of course, it is our priority to help the public buy affordable rice.”
He said they could discuss ways to come up with a “win-win solution.”
President Ferdinand Marcos Jr. on Friday ordered a price cap of P41 per kilo for regular milled rice and P45 per kilo for well-milled rice on Friday.
“They (traders) cannot just disobey or the government can file criminal cases [against them], apart from [impose] penalties,” he said.
“But definitely, the government will help our retailers affected by this executive order,” he added.
Romualdez, who joined Customs agents in raids on rice warehouses, earlier warned unscrupulous traders that the government was serious about fighting hoarders and smugglers.
He said they would do everything to help the President drive rice prices down to a reasonable level.
Romualdez and other lawmakers met with representatives of the Philippine Rice Industry Stakeholders’ Movement last week.
“If you want to be part of the solution, you are with us, we will help you, we’re going to support you. But if you’re part of the problem, we will root you out,” he told them.
“We won’t stop until the President is successful in achieving his targets. We’re very serious about it. And we’re not going to stop here in Luzon, we’ll go to Visayas and Mindanao. We’re going to hit every region,” he said.
Senator Grace Poe said the price ceiling imposed on rice should assure the people that the staple remains accessible.
In the long run, she said, solutions must be in place to keep the supply and prices steady, and bring growth to the agriculture sector, especially to our farmers.
She said authorities must address the unhampered smuggling and hoarding that continue to undermine efforts to improve farmers’ productivity, modernize agriculture and reduce the retail price of the staple.
The Department of Agriculture should also see to it that the benefits of the Rice Tariffication Law trickle down to the farmers to make them more competitive, she said.
Albay Rep. Edcel Lagman, meanwhile, said rice retailers who are worried they will lose money because of the price ceilings should submit sworn statements to the Department of Agriculture and the Department of Trade and Industry about their current rice inventories and their purchase costs to enable the government to address their concerns.
He said the National Food Authority can buy their inventory and resell it to the public at a regulated price, even at a loss, which it traditionally does.
“This strategy would not only help the farmers with existing and additional subsidies but also the rice retailers and consumers,” he said.
An advocacy group, the Foundation for Economic Freedom, said instead of imposing price ceilings, the government should cut import tariffs on rice to bring prices down.
It said Executive Order (EO) 39, which places a price ceiling of P41 per kilo on regular-milled rice and P45 per kilo on well-milled rice, will harm Filipino consumers and farmers, and the entire economy.
“The price cap will harm consumers because it will drive supply away from the market, fuel a black market for rice, cause traders to cheat consumers by mixing inferior broken rice with regular and well-milled rice, and incentivize traders to hoard as the price ceiling is below their procurement and selling prices,” the group said.
Lower-income consumers in particular will suffer when regular milled rice becomes less available in markets at a controlled price and is passed on as well-milled rice by traders, it added.
EO 39 will also hurt farmers because traders will use the price cap to justify lowering their buying price for palay, it added.