P20 per kilo rice? Possible, but ‘bad idea’ if subsidized without conditions —NEDA chief

The campaign promise of leading presidential candidate Ferdinand Marcos Jr. to bring down the retail prices of rice to P20 to P30 per kilo is possible, Socioeconomic Planning Secretary Karl Kendrick Chua said Thursday.

At a press conference, Chua, the chief of state-planning agency National Economic and Development Authority (NEDA), said, “If our support to our rice farmers are very targeted and efficient, then I think that is a possibility.”

Earlier, Marcos Jr. said he would recommend a price cap on rice and mandate government agencies to serve as middlemen in the procurement of harvests under his administration.

It will lower rice prices to P20 to P30 from the existing costs of 38 to P50 per kilogram for the local commercial prices in Metro Manila and P37.00 to P52.00 for imported commercial rice.

Chua said bringing the retail price of rice at the level promised by Marcos Jr. is possible under a liberalized trade regime, under the Rice Tariffication law.

The Rice Tariffication law allowed unimpeded importation of rice but with higher tariffs. The law aims to lower rice prices by flooding the market with imports.

To protect the local industry, the law provides a P10-billion Rice Competitiveness Enhancement Fund (RCEF), which shall be utilized for grants to provide farmers with equipment to improve farm mechanization.

“Under Rice Tariffication, the programs are expected to increase the yield per hectare from four metric tons to five or six metric tons, so that is possible actually,” Chua said.

Data from the Department of Agriculture showed that for the past two years since the enactment of the Rice Tariffication law, the country posted record harvest of 19.2 million metric tons and 19.96 million metric tons in 2020 and 2021, respectively.

Chua, however, said that if the support for farmers comes in the form of subsidy that does not tie to outputs, then the aim to reduce rice prices to P20 to P30 per kilo “might be a problem.”

“If we are going to use taxpayers’ money solely to subsidize without conditions and without any productivity measures, then that’s a bad idea,” the NEDA chief said.

The country’s chief economist also pinned hopes that the next administration will not change the Rice Tariffication law as it “is the best model that we have to help farmers and consumers.”

“By removing quantitative restrictions, we were able to address both the needs of consumers for lower retail price of rice and use the funding from the tariff, which I believe was at P18 billion last year to fully fund the RCEF or Rice Competitiveness Enhancement Fund,” Chua said.

“Those calling for the removal of the RTL risks taking away P18 [billion] we are giving to farmers to improve their productivity,” he said.—AOL, GMA News