The government must admit its failure to use lower tariffs on rice as the main solution to fight inflation, an agricultural industry group said on Sunday.
“Seven years is still a long time, but we must change the narrative now. Rice is a vulnerable global commodity as less than 10 percent of all production is traded globally,” said Jayson Cainglet, CEO of Samahang Industriya ng Agrikultura (Sinag).
He pointed to the decision by Vietnam and India to slash rice exports and increase world rice prices to underscore this.
“We have a very small international rice market; with only five major rice-exporting countries: India, Vietnam, Thailand, Pakistan and Myanmar,” Cainglet said.
World trade in rice is low compared to other agricultural products (20 percent and above), he said.
“This relatively small market means that the supply of rice [and rice prices] it has tended to be more unstable in the era of extreme weather. This year is El Niño and the cycle continues,” said the Sinag official.
In 2021, of the total 512 million tons of world rice production, less than 50 million tons (less than 9 percent) were traded globally.
“India’s decision [with 30 percent of global rice production] and vietnam [15 percent of total rice exports; but 80 percent to 85 percent of our rice imports] it will have a big impact on all net rice importing countries, especially the Philippines, if we continue with policies that incentivize a few privileged importers and favored traders,” Cainglet added.
“Now is the time for Neda [National Economic and Development Authority] and our economic team to accept these realities,” he said. Sinag said unlimited imports and low tariffs have never tamed rice prices and never will.
Prices of imported rice are more expensive, in fact, according to the DA’s (Department of Agriculture) own monitoring by Bantay Presyo.
“Rice prices in the global market range between $500 and $540 per metric ton [/MT] our main source of rice imports,” Cainglet said.
Meanwhile, he said that the last two growing seasons “have been very positive for our rice growers due to the extended help from the private sector.” [buying palay from P21/kilo and up] and increased fuel and fertilizer subsidies from the government.”
Farm prices have increased and the cost of palay production has been reduced due to these interventions.
These developments are encouraging farmers to plant, and further institutional support from the DA would further encourage the local rice industry, he said.
“It is time that we finally support our local rice farmers; incentivize local millers, promote food sovereignty and end the mindset that imports are manna for our benevolent importers,” said Cainglet. BusinessMirror tried to get the Department of Agriculture’s reactions to Sinag’s statement, but had no comment as of press time.