THE Federation of Free Farmers (FFF) is alarmed over a drop in palay (unmilled rice) prices at the start of the harvest season amid the impending arrival of cheap imported rice.
The FFF said freshly harvested palay is being bought from farmers in Nueva Ecija, Pangasinan, Mindoro Occidental, Sultan Kudarat and North Cotabato from P21 to P23 per kilogram (kg) and as low as P16.50/kg in some parts of Nueva Ecija.
“Traders are afraid the fresh harvests will coincide with the arrival of cheap imports, which will result in oversupply. So they play safe by buying low from farmers,” FFF National Manager Raul Montemayor said in a statement.
Tariffs on rice imports fell to 15 percent from the previous 35 percent, as mandated by President Ferdinand Marcos Jr.’s Executive Order 62 to help manage food inflation caused by the rising retail cost of rice in the past months.
However, the FFF noted that the retail price of rice has since decreased by an average of only P0.40/kg, or 0.5 percent, as opposed to the promised drop of P6 to P7/kg.
Agriculture Secretary Francisco Tiu Laurel, Jr. earlier said retail rice prices are projected to start declining in October due to the import tariff cut. The full impact, Tiu Laurel added, may be felt in January 2025.
The FFF disputed claims that the retail market’s slow reaction to the tariff cut was due to traders selling their rice stocks bought at higher prices in previous months.
“It does not make sense for traders to hold on to cheap stocks imported with a 15-percent tariff while retail prices are still high. They are, in fact, maximizing their profits now instead of passing on their tariff savings to consumers,” Montemayor said.
The FFF estimates the government lost P3.4 billion in customs duties from 581,000 tons of dutiable imports due to tariff reductions in July and August.
The Department of Agriculture should focus on helping farmers cope with La Niña and the anticipated drop in palay prices, said the FFF.
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