Ferdinand Marcos Jr.’s aspiration to sell rice at P20 a kilo will never ever happen. It is not sustainable. It will drain the government’s resources if the president wants to make it happen.
In the end, it will be the taxpayers that will be burdened just for Marcos to win brownie points.
During the presidential election campaign, candidate Marcos promised to bring down the price of rice, the country’s staple, to P20 a kilo. Many believed and voted for him.
Last week, at the inauguration of the “Kadiwa sa Pasko” stores in Metro Manila, the government sold rice at P25 a kilo but limited consumers to only three kilos per person.
Bongbong Marcos boasted that his dream of selling affordable rice to the public was only a matter of time, lifting the spirits of 31 million people who voted for him.
A day after the “Kadiwa” stores opened, they stopped selling rice at P25 a kilo after the supply was exhausted. The stores were still waiting for the government to replenish the supply of cheap rice.
Will the “Kadiwa” stores continue selling rice at P25 a kilo? That remains to be seen.
Bongbong’s promise to sell rice at P20 or P25 a kilo is a cheap publicity stunt. The government has no enormous funds to subsidize rice prices.
A former agriculture department official said the government would need about P400 billion a year to subsidize rice prices at P20 per kilo.
However, the farm department has a budget of only a little over P100 billion next year. Where will it get more than P300 billion to sustain a project to sell P20 per kilo of rice in the market?
Commercial rice is available in the market at more than P35 per kilo. The imported variety from Thailand and Japan costs more at nearly P60 per kilo.
Local farmers are selling palay at P17 to P19 per kilo. Two kilos of palay produce a kilo of milled rice sold at more than P30 per kilo.
Before the rice tariffication law was introduced, the government through the National Food Authority (NFA) sold rice at P27 per kilo, buying from local farmers.
But the law prohibited the NFA from competing with traders and was only allowed to stockpile rice supplies to be used during disasters and emergencies.
Lawmakers say the rice tariffication law has helped local farmers after the government collected more than P100 billion in taxes from rice importers.
However, the lawmakers forgot to say the losses in the farm sector exceeded the taxes collected from the rice tariffication law.
The farm sector needed more subsidy in terms of seeds, fertilizer, irrigation, and machinery to increase rice production. It also needed investments in farm-to-market roads, post-harvest facilities, and huge grain storages.
The country’s farm sector is inefficient and antiquated. There are still many areas where farm animals are used to plow non-irrigated farmland.
It is easier, faster and cheaper to import rice from Vietnam than transport rice harvest from Mindanao where dozens of stevedores are needed to load sacks of rice to a vessel, taking several days, when in a matter of hours a boatload of rice can ship from Thailand or Vietnam.
The quality of imported rice is also better than locally milled rice.
Farmlands in the country are also rapidly shrinking because farmers are willing to sell their lands to property developers, turning the fertile farms into residential subdivisions and commercial and industrial complexes.
Shrinking farmlands means declining production, resulting in shortages. The Philippines imports an average of two million metric tons of rice every year because the country’s rice sufficiency is at 90% to 95%.
A hectare of riceland in the Philippines can produce the same number of metric tons in Vietnam and Thailand because of advanced technology in rice farming.
However, Thailand and Vietnam have contiguous rice farms compared with the archipelagic Philippines. Rice is grown better in Central Luzon, Cagayan Valley, and in the Panay area in the Western Visayas region.
But the Philippines is very unfortunate because of adverse weather conditions. An average of 20 tropical storms visit the country every year and some are very destructive and can wipe out farmlands due to floods and strong winds.
There are also storms in Thailand and Vietnam but these weather disturbances pass through the Philippines first and sometimes they dissipate before reaching Vietnam.
The Philippines has become a top rice importer in the world because of its population. With a population of nearly 110 million people, the annual 20 million metric tons of rice production is not enough to feed the entire nation compared with Thailand and Vietnam, which have less than 80 million people each.
They will always have an excess in rice production which they could export to the Philippines.
Rice is a very sensitive commodity in the region. A severe shortage could result in civil unrest in a country. There had been instances when the government resorted to rationing rice in the past — during the time of dictator Ferdinand Marcos and former president Gloria Macapagal Arroyo.
Bongbong has learned his lesson. He wanted an affordable price of rice as secretary of agriculture. He does not want to fail the 31 million people who elected him into office.
But he could be raising false hopes by promising to bring down the price of rice to P20 per kilo.
It could be done if there is abundant supply and the government has adequate funds to subsidize rice. It could even lower the price to P10 per kilo by increasing subsidies.
However, the realities do not support Bongbong’s aspirations.