SEPT. 3, 2023 — The National Economic and Development Authority (NEDA) supports the issuance of Executive Order No. 39 on imposing mandated price ceilings on rice to combat hoarding, profiteering, smuggling, and cartelization.
We are facing difficult times, and concerning the agriculture sector, the El Niño Southern Oscillation (ENSO) phenomenon is a major disruptor. The ENSO has intensified the Southwest Monsoon and is expected to result in below-normal rainfall towards the end of the year in many countries along the Pacific. These extreme weather events adversely impact the agriculture sector, particularly rice.
Moreover, the trade-restricting protectionist behavior of certain rice-exporting countries, such as India’s ban on non-basmati rice exports to keep prices low at home, and the aggressive move of rice-importing countries to secure supply have resulted in a decrease in the volume of rice being traded and expected to be traded in the global market. The Government’s priority amid this situation is to ensure that the country has an ample supply of affordable rice.
Currently, the country has enough rice supply for the third quarter. With the upcoming harvest season starting in September and additional import orders already secured, there will also be enough rice for the rest of the year.
That said, we note that the price of rice has been sharply increasing over the past weeks, which is inconsistent with the apparent supply and demand situation. This implies that some are manipulating the expected impact of ENSO to depict a shortage at this time.
The imposition of a price ceiling on rice will address this issue in two ways: (1) it will immediately reduce the price of rice, and (2) it penalizes and consequently discourages hoarding, further decreasing the price of rice.
The imposition of a price ceiling on rice is not a standalone initiative. Law enforcement authorities continue their valiant efforts to crack down on individuals who hoard, excessively profit from, smuggle, or participate in rice cartels.
The Rice Competitiveness Enhancement Fund (RCEF) continues to support farmers nationwide, enhancing their livelihoods and capacity to produce the rice Filipinos need. The Inter-Agency Committee on Inflation and Market Outlook continues to closely monitor the prices of rice and various other goods to provide anticipatory policy advice on dealing with inflation. The Department of Agriculture continues its efforts to ensure that there will be enough rice for all Filipinos.
We recognize and appreciate well-meaning actors in the rice market, such as farmers, cooperatives, traders, and importers, who are helping the Government ensure that every Filipino has access to affordable rice.
We are confident that the imposition of a price ceiling is only a temporary measure. We expect the rice harvest to commence soon and anticipate that other initiatives will produce the desired result.
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