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P20 rice seen possible late in Marcos term; to require massive investment

By Luisa Maria Jacinta C. Jocson, Reporter

PRESIDENT-ELECT Ferdinand R. Marcos, Jr.’s campaign promise to lowering the price of rice to P20 per kilo can be accomplished later in his presidency, but will require production and subsidies to ramp up dramatically, farm industry officials and analysts said.

“In a regime like the Philippines that is not 100% self-sufficient because of crop failures brought about by typhoons… (P20 rice) is possible within his six-year term,” Roy S. Kempis, retired Pampanga State Agricultural University professor, said in an e-mail.

“Any number less than or equal to P30 per kilo can be attained early in his term,” he said, adding that approaching the P20 range will come late in the Marcos presidency.

“It is unrealistic though to attain this in 2023 or so. There is a confluence of factors to contend with,” he added.

On Monday, the President-elect announced that he would be heading the Department of Agriculture (DA) for the time being, signaling his intent to follow through on agriculture-related campaign promises with an international food crisis looming.

“From the very beginning, I always said that agriculture was going to be a very critical and foundational part of our economic transformation,” Mr. Marcos said in a news conference.

Mr. Kempis said bringing down commodity prices, in general, depends on abundant supply.

“To have enough supply, you have to increase production of palay (unmilled rice); to increase production of palay, you either do this with technology, or cluster rice farming, or open new land for rice production, or increase the price of palay so rice farmers or those who paused or stopped producing can be enticed to produce palay again,” he said.

“All these can possibly increase production and eventually supply. And still farmers have to contend with the rising cost of inputs, especially those that are dependent on oil or are affected by speculation on the magnitude of price increases of fuel,” he added.

RCBC Chief Economist Michael L. Ricafort said that achieving higher yields will require exploring different varieties and investing in more efficient technology.

“Further increasing productivity of rice harvests per hectare through higher-yield rice varieties and further mechanization to also lower costs would help bring down the price of rice and also help increase food security and reduce reliance on imports,” he said.

Mr. Ricafort added that bringing down prices might be difficult due to the global supply chain disruptions as a result of the pandemic and the Russia-Ukraine war.

“Given the higher prices of agricultural inputs in recent months largely brought about by the Russia-Ukraine conflict, such as oil, which increased transportation costs, fertilizer, and other inputs, it would be tough to bring down the price of rice. In fact, some rice exporting countries plan to increase prices in view of these,” he said in a text message.

“Even importing cheaper rice under the Rice Tariffication Law showed that further lowering of rice prices has been challenging in recent years, even before the Russia-Ukraine war, which sent global commodity prices to elevated levels,” he added.

ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa added that the new administration will need to get creative in finding ways to source inexpensive inputs and increase productivity and efficiency.

Mr. Kempis said that the government will also likely require subsidies if it plans to drastically slash prices.

“We need more production to attain sufficiency, and this is possible, but not instant… there is room for the possibility that Mr. Marcos’ promise can happen, but this has to be aided by some government subsidy in the buying price of palay. This subsidy is going to be the government’s expense and the National Food Authority may incur more debt,” he added.

“It would take a lot of effort to achieve this price goal, such as significantly increasing the yields on rice harvests through greater mechanization and higher-yielding varieties. This would also potentially require huge amounts of subsidies for rice farmers that would also be challenging, given the government’s limited financial resources amid wider budget deficits,” Mr. Ricafort said.

Agriculture industry associations said, with Mr. Marcos in the Department of Agriculture, they expect more attention to be paid to the sector.

“Agri-fisheries will be the major focus of the (next) administration. We expect him to mobilize the powers and resources of the Presidency to revive and strengthen our long neglected sector. Our main wish is that (he) will place full trust and confidence in the willingness and capability of our farmers and other stakeholders to provide food and jobs for our people,” Leonardo Q. Montemayor, chairman of the Federation of Free Farmers, said in a statement.

Current Agriculture Secretary William D. Dar said that he welcomes the President-elect’s decision to take control of the department.

“This is the brand of ‘political will’ that we have been advocating since we assumed office in August 2019. It is a very strategic decision, giving the agriculture sector utmost priority, and thus a bigger budget for the DA in the years to come,” he said in a statement.

“The present leadership is ready to brief the President-elect at his most convenient time, and we assure him of our strong support and cooperation, as we truly want him to succeed,” he added, noting that a transition report was ready for the next administration.

Sorsogon Governor Francis Joseph G. Escudero said in a statement that Mr. Marcos at the DA will be able to “cut a lot of red tape” and put all the resources needed into the department.

Senator-elect Joseph Victor G. Ejercito said that the decision to become Agriculture Secretary indicates the President-elect’s seriousness in addressing the food crisis.

“It’s a strong signal to the agencies under DA that they should all get their acts together,” he added in a statement.

“It may not be the end-all and be-all solution to all the problems besetting the agricultural sector including the food crisis but for sure decision-making will be really fast and solutions can be undertaken and implemented right away,” incoming Senator Jose P. Ejercito, Jr. said in a statement.

A fishermen’s association, Pambansang Lakas ng Kilusang Mamamalakaya ng Pilipinas (PAMALAKAYA), said Mr. Marcos may not be able to address issues plaguing the fisheries industry due to lack of experience.

“PAMALAKAYA said that if Mr. Marcos wants to address the industry’s problems, he should “renounce the liberalization policies that bankrupt the sector.”