Salceda warns of rice price crisis

National, News

A congressman has warned of a possible rice price crisis in weeks to come as drought continues to pummel staple grains sources like Thailand and Vietnam, aggravating the impact of the COVID-19 pandemic in rice importing countries like the Philippines.

House Ways and Means Chair Joey Sarte Salceda (Albay, 2nd district) who sits as co-chairman of the House Stimulus Cluster, noted that a rice price crisis will make the country’s response more costly, since world stocks are being kept out of trade by export bans. He said the Departments of Agriculture (DA) and of Trade and Industry (DTI) should anticipate apparent challenges in supply pointing out the “warning signs” of upcoming issues on rice price and accessibility in the coming weeks.

“I was shocked when I started buying rice from the NFA for my relief donations, then at P1,250 per bag only. When the NFA stock ranout, we purchased from commercial stores and the prices progressively shot up and  recently hit P1,850 per bag. What happened? I thought there was a rice price  freeze,” he said.

As of March 1, 2020, the country’s total rice stock  inventory stood at 2,178.64 metric tons, 1.9 percent lower year-on-year, and 8.3 percent lower month-on-month… and harvest season doesn’t come until May. He said China’s withholding from Mekong and temptations towards export ban pose risk to supply. The current COVID-19 crisis should remind policy makers that food security and health goods security are two vital national concerns, he added.

Salceda further cautioned DA and DTI about possible manipulations from rice cartels to take advantage of the emergency, and derail government’s urgent efforts to deliver foodstuffs on time to communities under the enhanced community quarantine (ECQ). “How prices actually are in public markets and other retail outlets depend on transport, logistics, and demand situations in these areas. While bulk purchases by government and provision of rice as relief goods for lower income families are expected to dampen price increases in the aggregate, issues in transport, logistics, and the presence of local cartels may push prices upwards,” he noted.

The lawmaker once more urged DA and DTI to “unchain the whole supply chain” for smooth delivery of food requirements to communities through government checkpoints most of which seem confused by regulations and thus, in most instances, unduly stall the vital food supply delivery. “Historically, we’ve had challenges with rice price and supply in economic and social crises, but those challenges were rarely about having enough rice for everyone. The issues have always been about getting the national supply of rice into the communities needing the staple. These challenges are made starker now by delays in ECQ checkpoints,” Salceda obsetved.

He said there also existing export bans in Vietnam and Cambodia due to drought and low water supply from the Mekong river. He also cited global data showing rice prices in the world market went up by as much as 12% weekly since the first week of April. “Hence, the need to be prepared. Our monitoring will have to span the whole chain, from farm to points of retail sale. Harvest season doesn’t come until May. So, we have to be better prepared,” he added.

Salceda said ensuring adequate supply of rice and other prime commodities is essential to effective enforcement of ECQ and other non-pharmaceutical interventions (NPI). “The surer the supply, the less likely people will violate stay-at-home and quarantine rules. If they’re not sure they can buy rice at fair prices, our people will break the rules,” he warned.

The Albay lawmaker also bewailed persisting issues about checkpoints. “Just recently, the National Food Authority (NFA) reported that some drivers of 14 trucks carrying 14,000 sacks of rice from Regions 1, 2 and 3 failed to meet at their Malolos warehouse and haul rice to Valenzuela and Cavite. Only 8 trucks reached the Malolos warehouse because the other six were allegedly held at quarantine checkpoints,” he shared.

In a paper titled “Potential Issues in Rice Supply in the Philippines during the ECQ”, Salceda recommended the following measures to ensure adequate supply in all areas: 1) DA and DTI must monitor the strict implementation of their respective issuances on the flow of rice and other essential commodities – as well as the necessary inputs to produce and process these commodities, such as fertilizers and pesticides – should remain unhampered;

2) To burst artificially inflated prices in local areas, DA and the DTI may open mobile stores and other similar schemes that sell rice and other commodities at fair prices; 3) Facilitate matching of rice producers and markets to keep middleman costs at a minimum; 4) Develop an online, citizen-based monitoring of the prevailing prices of rice and other prime commodities. In localities with anomalously higher prices compared to baseline or expected prices, DTI and DA must use appropriate interventions such as stricter monitoring and enforcement of retail price measures. The system will also allow consumers to compare prices in nearby areas, making local cartel practices easier to spot and prevent;

5) Secure commitments for adequate supply from supplier countries such as Vietnam and Thailand, while also sustaining support for local production through programs such as the Rice Competitiveness Enhancement Fund (RCEF) and the National Rice Program; 6) Relax rules on rice importation, and consolidate small import orders through the Philippine International Trading Corporation (PITC); and 7) Ensure that the labor force across the rice supply chain (from farmers, to millworkers and transport drivers) are able to work and are conferred the privileges granted to those who work in essential services.

Quoting field reports, Salceda said that “in some checkpoints, many are still confused. . . . they  still delay transport of inputs such as fertilizers and pesticides. We can’t produce rice without those inputs. I’m asking the DA and DTI to make sure we unchain the whole supply chain.

“That’s why as early as the first week of the ECQ, I requested the Inter-Agency Task Force on Emerging Infectious Diseases (IED), and the DA and DTI to rationalize checkpoints and ensure the unhampered flow of goods and inputs to essential goods,” he explained.

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