High production cost behind rice price hikes

MANILA, Philippines - Rising production cost and not a shortage in supply is behind the recent surge in prices of rice, Agriculture Sec. Arthur Yap said Monday. In an interview on radio dzBB, Yap belied claims made by Sen. Manuel Roxas II that a shortage in the supply of rice is fueling the rise in local rice prices, and that the country is now facing a rice crisis. "Huwag na lang po kayong maniwala sa akin. Kayo na lang pumunta sa mga palengke. Kayo na lang pumunta sa mga supermarket at grocery. Tignan po natin kung nagkukulang ang mga butil," Yap challenged Roxas. "Tanungin niyo din yung mga nagbebenta at yung mga supplier nilang galing Nueva Ecija, Bicol, Isabela, Pangasinan, ano ba magkukulang ba? O mataas lang ba talaga ang production cost ngayon kaya sumisipa ang presyo?" he added. Yap noted the 150 percent increase in rice production cost, attributing it to the spiking of the petroleum prices and added, "Dahil rin po sa pagdedeliver ng bigas papunta dito (Manila), mataas din po." Stressing that there is shortage in local crops, Yap cited reports from the Bureau of Agriculture Statistics and the Philippine Rice Research Institute, indicating that 7.1 million metric tons of summer crops are expected to be produced from April to June, up from last year's 6.7 million MT during the same period. Yap, however, warned against millers and rice traders who might take advantage of the situation and hoard their products, causing the prices of rice to jack up. "Ang babantayan natin ay yung pagho-hoard ng palay dahil 'pag tinago po iyan tapos unti-unting i-release, baka umakyat pa ang presyo. Babantayan po natin ang ating millers and palay traders," he said. "Pinarere-license po natin lahat ng palay traders at millers dahil gusto natin maisgurado na pag naginventory count ang DA, may basehan kung anoa ng hawak nlang butil at palay," he assured. Last Sunday, Sen. Mar Roxas said that the Arroyo administration is "in denial" and has been issuing conflicting statements on the alleged rice crisis. Roxas said that the looming surge in prices of rice and other basic commodities are a testament that there is indeed a shortage of the staple. "The government is in denial. Merong krisis sa pagkain. Econ 101 'yan, tataas ang presyo kung mahigpit ang supply. Nasa P24-P26 na ang kilo ng regular na bigas mula noong P20-P22. Ito'y dahil nga sa kahigpitan ng supply," Roxas said. Roxas said that in order to address the rice crisis, the government must first acknowledge that there is indeed a shortage. "Mrs President, be a force for good by getting real. Magpakatotoo tayo. Mas mabuting sabihin na 'ito ang problema at solusyon,' kaysa sabihin na wala tayong problema pero tataas ang presyo ng bigas at iba pang bilihin," said Roxas, who sits as chairman of the Senate Committee on Trade and Commerce. As a solution, Roxas recommended among others that calamity funds in rice-producing provinces in the country be immediately released and that proper rice distribution especially to children and the elderly be met. The senator also encouraged the revival of the peace process in insurgency-torn regions so as to tap anew farming lands in these areas. He also proposed the creation of an investigating team that would run after hoarders, profiteers, members of the rice cartel and other "corrupt elements" at the National Food Authority who divert stocks from public to private outlets. For her part, Sen. Loren Legarda said that for the next two to three years, the government should begin the complete, if not exclusive, utilization of two multi-billion-peso funds to address the rice problem. Legarda said that the P17-billion Agriculture and Fisheries Modernization Program and the Agricultural Competitiveness Enhancement Fund, which had a cash balance of P6 billion as of December last year should be used "at least temporarily anyway, primarily to consciously enlarge rice production." "These funds can be tapped to enable rice farmers to achieve greater productivity via exceptionally potent seeds, greatly improved irrigation, or with adequate water-impounding structures and other drought-mitigating measures," Legarda said. Legarda added that these two funds could also be used to set up "post-harvest facilities" that would ensure that harvested rice would not be spoiled and would go through proper milling and storage processes. Legarda echoed Roxas's sentiment that local production must be intensified to remedy the shortage, thereby easening in the long run the impending price hikes that might be triggered by the rice crisis. "Ample supply is the surest way for us to ward off higher rice prices as well as broader consumer price increases that may be associated with rice price inflation," Legarda said. - Mark Merueñas, GMANews.TV