THE Department of Agriculture (DA) said on Thursday that it is no longer considering a suggested retail price (SRP) scheme for rice and other agricultural products.
“We’re not doing it. Prices of rice and other agricultural products in international markets like Thailand are volatile and fluctuating due to El Niño. Hence, we’re not proposing to control prices at the moment,” Agriculture Secretary Francisco Tiu Laurel, Jr. said in a statement.
Last week, the DA said that it was considering a rice SRP to contain rising prices.
Mr. Laurel added that the SRP plan “was just an idea based on available remedies according to Republic Act 7581, or the Price Act.”
“I’m well aware that setting retail prices, even if just suggested, for particular goods tend to be counterproductive, especially when there is ample supply,” he said.
Under the Price Act, the DA has the authority to stabilize the prices of crops, fish and other marine products, fresh meat, fresh poultry, dairy products, fertilizer and other farm inputs during emergencies.
According to the DA, it needs to come up with implementing rules and regulations (IRR) to enforce the parts of the law that concern farm goods.
Mr. Laurel has ordered the creation of a technical working group to draft the IRR.
“We will not hesitate to use the powers and remedies at our disposal to ensure that our farmers and consumers are amply protected against those who may want to exploit any supply shortage,” he added.
The DA said other countries are seeking to increase their grain reserves in anticipation of lower production due to dry spells brought on by El Niño.
The government weather service, known as PAGASA (Philippine Atmospheric, Geophysical and Astronomical Services Administration), has said that El Niño’s intense phase could run until the second quarter and bring droughts or dry spells to 63 provinces.
“We’re building up a buffer, largely through imports, to ensure we have ample supply of rice as we await the next harvest starting March. This should help keep prices stable without government intervention,” Mr. Laurel added.
The DA has said that it is expecting 500,000 metric tons of imported rice to arrive as the government builds up reserves in preparation for the worst phase of El Niño.
Last year, a surge in the price of rice prompted the government to briefly implement price controls.
Executive Order No. 39 capped prices at P41 per kilogram (kg) for regular-milled rice and P45 per kg for well-milled rice. The price controls ran from Sept. 5 to Oct. 4.
Mr. Laurel said that another set of price controls on rice would affect producers, who bear the brunt of lowered prices.
“In most cases, farmers bear the brunt of a price limit because traders will only lower their purchase prices to keep their margins. Consumers also don’t benefit in such a situation. It could also fuel price speculation and hoarding that will evolve into another problem altogether,” he added. — Adrian H. Halili