Industry stakeholders on Thursday said government efforts to sell rice at P25 per kilo through state-run Kadiwa rolling stores might be long on intention but warned that such are unsustainable in the long run.
Jayson Cainglet, Samahang Industriya ng Agrikultura (SINAG) executive director acknowledged that subsidized rice at P20 per kilo benefit consumers but complained this is done “at the expense of depressing farmgate prices.”
“The P25 per kg rice being sold at Kadiwa centers are subsidized rates because that is not the cost structure of rice. Can the government actually sustain and increase the volume of rice at P25 per kilo being sold at Kadiwa? As it is now, rice farmgate price is at P23 to P23.50 per kilo so the retail price of rice, without government intervention, hovers around P42 to 46 per kilo,” Cainglet said.
According to SINAG, the cost of producing rice has increased by P2 to 3 per kilo or P16 to 17 per kilo due mainly to the increase in the cost of fuel and logistics.
“The cost of imported rice has also gone up due to global price increase of farm inputs and fuel costs, plus the lower value of the peso against the dollar. So, we hope the economic managers would not advise the President to push for more rice imports in the guise of the P20 per kilo of rice and should only give the correct information to the President,” the group added.
Cainglet also said the low retail price of rice country can only be sustained if the government introduces interventions that lower the cost of producing palay while also cutting post-harvest losses and removing non-productive players in the supply chain.
Raul Montemayor, Federation of Free Farmers (FFF) national manager, said selling rice at P25 to P20 per kg is possible depending on how willing it is to lose money by providing subsidies.
“The farmgate price of palay has just risen to P23 per kilo. At that price, the price of rice has to be at least P40 just to break even. The National Food Authority buys palay at P19 per kilo and needs to sell rice at P35 per kg to recover cost. Selling rice at P25 or P20 is always possible, depending on how much the government is willing to lose in terms of subsidy,” Montemayor explained.
The FFF reiterated that the P25 per kilo price of rice at Kadiwa rolling stores is “artificial and unsustainable” and may have a “good intention but of doubtful long-term impact.”
