Former Philippine President Rodrigo Duterte has ridiculed President Bongbong Marcos’s proposal to set the price of rice at P20 per kilo, stating that this figure is merely a “daydream” in the face of global supply and demand dynamics.

Duterte, on September 6, emphasized that the retail prices of rice could potentially soar as high as P90 per kilo.

In a candid assessment, Duterte urged Filipinos to confront the reality that achieving a P20 per kilo price for rice is an impractical aspiration given the current market conditions. He cited the escalating costs of fertilizers and agricultural equipment, factors that contribute to rising production expenses.

Duterte explained, “By our standard, P20 is masyadong mababa ‘yan (too low), and rice-producing countries have also limited the volume of rice they could export as they also do not have enough land to plant rice on. It is development, from forestal to agriculture, then to commercial.”

Duterte acknowledged that the government may need to incur losses of at least P3 billion to procure rice at a higher price, which would allow for the sale of rice to the public at a lower cost.

This approach aims to avert a potential “revolution” triggered by a food crisis.

To mitigate the impact of Executive Order No. 39, which imposes price ceilings on regular and well-milled rice, the Department of Social Welfare and Development (DSWD) launched the Sustainable Livelihood Program (SLP). T

his initiative seeks to cushion the expected losses of small rice retailers resulting from the temporary price cap. The executive order took effect on September 5, setting price caps at P41 and P45 per kilo for regular-milled and well-milled rice, respectively. The SLP provides startup capital for individuals interested in launching small businesses.

To address the looming food crisis, the government may consider imposing an embargo on the existing rice supply stored in various warehouses, allowing for better control of the rice supply.

In response to the rising costs of rice, the Federation of Free Farmers (FFF) has rejected proposals to temporarily reduce tariffs on imported rice, as this could further harm local farmers.

Despite rice being a significant driver of August’s 8.5 percent inflation rate, the National Economic and Development Authority (NEDA) suggested temporary tariff reductions to lower domestic prices.

Currently, importers benefit from a reduced tariff rate of 35 percent on rice until the end of the year, as specified in EO 10, down from the original 50 percent rate.

The FFF argued that reducing tariffs further to 10 percent, as proposed by some, could lead to a P6 per kilo drop in palay (unhusked rice) prices, resulting in farmers losing an estimated P120 billion annually.

They expressed skepticism that such a tariff reduction would lead to lower retail prices, given that prices continued to rise even after tariffs on rice from non-ASEAN member-states were reduced to 35 percent from 50 percent starting in 2021.

Rather than endorsing tariff reduction proposals, the FFF called for accountability from proponents, asserting that their past recommendations had harmed small farmers and the agricultural sector.