President Ferdinand Marcos Jr. has made it a campaign promise to bring down rice prices at P20 per kilogram.
Yet the first half of his term saw the highest rice prices in years, forcing the government to roll out a slew of drastic interventions: the price cap in 2023 and a food emergency in February.
Produce and food production projects are commanding one-fourth of the P200 billion budget for the Department of Agriculture this year, the highest in the last five years. Around P21 billion has been earmarked for the national rice program.
While demand and supply still hold the largest influence in setting prices, experts say the key is to address challenges in every step of the value chain—a gargantuan task for a multilayered, complicated and “chaotic” industry.
“Kapag sinabi mong pano pabababain sa retail, tutumbukin mo ‘yan pababa [sa value chain]. Saka saan nagkakaron ng layers na pwe-pwedeng magcontribute sa mataas,” Raul Montemayor, national manager of the Federation of Free Farmers (FFF), told the Philippine Center for Investigative Journalism. “Bawat pasa [ng palay, bigas] merong mark-up yan e.”
The industry still lacks adequate infrastructure, from disconnected irrigation systems to road networks. Experts say these remain burdensome for players in the industry.
“Basic infrastructure, irrigation is still very much an issue,” agriculture policy expert Roehl Briones, senior research fellow at the Philippine Institute for Development Studies, told PCIJ.
“Efficiency in the usage of water has been eliminated because of free irrigation. Unless you bribe the irrigators association, it’s difficult to roll out water efficiency technologies like alternate wet and dry. These are the unintended consequences of something ostensibly in favor to protect, support the farmer.”
The government has also blamed hoarders and a “rice cartel”—but can they thrive in the current industry?
The PCIJ interviewed various experts in the rice production industry to pin down factors that influence pricing. Here’s their take:
- Logistics, pass-through fees, bribes
Bringing rice grains from farms to plate in the country remains an expensive process, according to FFF’s Montemayor. Local government units also collect pass-through fees, which add to the transport costs. Some local governments even impose truck bans. Bribes run rampant too, he said.
“Mahal pa rin kasi from the farm to the trader, from the trader, miller. May transport ka dyan. So kung sira-sira ang kalsada or maraming nangongotong—that is a cost,” Montemayor said.
“Lahat nung mga extra costs na ‘yan kino-compute ‘yan ng mga negosyante and then dun nila babawiin sa mababang presyo sa pagbili ng palay. Para maibenta naman nila sa bigas na kikita sila. So kapag mahal ‘yung cost, ang tendency ay tataas ang presyo ng bigas. Kasi that’s the cost for bringing the rice all the way to the consumer,” Montemayor explained.
- In-kind payments: Leasehold system, moneylenders
Some farmers still don’t own their land and rent farm lots from friends, relatives or other farmers. Farmers who engage in such an agricultural leasehold system usually use a portion of their harvest to pay for debts. This ranges from 12 to 15 sacks or depending on the value of the debt, according to Rafael Mariano of the Kilusang Magbubukid ng Pilipinas (KMP).
It doesn’t end there. Most farmers also depend on local money farm lenders or usurers who allow them to borrow either money or farm inputs such as fertilizers. Sometimes, even owners of machine harvesters or traders get a portion of the palay—if farmers owe them money.
“Ibig sabihin may napunta sa land owner, may napunta sa usurer, may napunta sa owner nung combined harvester, o may mapupunta kaagad na palay sa kamay ng palay trader. Ibig sabihin dun pa lang meron nang nakaka-kopo nung malaki-laking ani ng palay ng magsasaka,” Mariano said.
Orly Manuntag, spokesperson for the Grain Retailers Confederation of the Philippines and co-founder of Philippine Rice Industry Stakeholders Movement, said lessee farmers tend to have higher production costs compared to other farmers due to the high interest rates added to debts. This contributes to the plight of farmers in the countryside.
“Maraming pamamaraan na isa yun sa nagpapabaon sa mga magsasaka natin sa kanayunan. Maraming nangyayaring ganyan,” Manuntag said. On the other hand, farmers who till their own land can freely choose buyers, a stark difference from farmers who pay for renting farm lots, he said.
