DA rejects price controls to slow rice inflation

The Department of Agriculture (DA) has turned down proposals to introduce a suggested retail price (SRP) for agricultural products, specifically rice.

Agriculture Secretary Francisco Tiu Laurel, Jr. said on Thursday, Jan. 11, that the agency is not considering the proposed imposition of SRP owing to the volatility of global commodity prices caused by El Niño.

“We’re not doing it,” Laurel said in a statement. “Prices of rice and other agricultural products in international markets like Thailand and other countries are volatile and fluctuating due to El Niño.”

Laurel’s recent statement indicates that the government prefers a market-driven pricing system for agricultural products.

“We’re not suggesting to control prices at the moment,” the DA chief said.

The proposal to introduce a SRP followed the 19.6 percent surge in rice inflation in December, the highest surge in 14 years.

To recall, President Marcos implemented last September a price ceiling for rice, which resulted in issues such as shortages and the emergence of underground markets due to imbalances in supply and demand.

Laurel clarified that the SRP proposals and stakeholder consultations were based on potential solutions outlined in the Price Act, or Republic Act No. 7581.

The Price Act grants the DA the authority to maintain stable prices for key agricultural products such as rice, fish, meat, poultry, and fertilizers during times of emergency.

“I’m well aware that setting retail prices, even if just suggested, for particular goods tend to be counterproductive, especially when there is ample supply,” Laurel said.

Earlier, DA Spokesperson and Assistant Secretary Arnel de Mesa said the agency was already working on SRPs for rice products by consulting with industry players and stakeholders.

Laurel emphasized that the price ceiling primarily affects the farmers, as traders may only lower their purchase prices.

“Consumers also don’t benefit in such a situation [because] It could also fuel price speculation and supply hoarding that evolves into another problem altogether,” he added.

Meanwhile, Laurel said the DA should establish first the implementing rules and regulations (IRR) before delving into the Price Act.

He added that the formation of the technical working group (TWG) for the Price Act IRR should serve as a deterrent to those considering exploiting the current supply situation.

“We will not hesitate to use the powers and remedies at our disposal to ensure that our farmers and consumers are amply protected against those who may want to exploit any supply shortage,” he warned.

With the strong El Niño expected in the coming months, the DA chief said that international rice prices are changing as countries aim to boost their rice reserves through imports, which the Philippines is also doing.

“We’re building up a buffer, largely through importation, to ensure we have ample rice supply as we await the next harvest starting March,” Laurel said. “This should help keep prices stable without government intervention.”

He further said that the DA is making efforts to ensure an adequate supply of agricultural products to prepare for the extended dry spell, as well as developing strategies to alleviate its impact on local production.

Meanwhile, the National Irrigation Administration’s upper Pampanga Integrated Irrigation System reported a sufficient water supply, which could guarantee a strong rice output.

This irrigation system assists in providing water to farms in major rice-producing provinces such as Nueva Ecija, Bulacan, and Pampanga. — Gabriel Christel Galang