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May 23, 2016 @ 6:54

Pwede naman pala: ‎Price of rice can be cut by nearly half to P19 per kilo – PIDS

PHP19/KILO RICE, POSSIBLE – PIDS

Rice prices in the Philippines can be cut down in half, based on a study by the Philippine Institute for Development Studies (PIDS).

The study entitled “Competition Reform in the Philippine Rice Sector,” said that rice prices could decline from P33.08 per kilo to around P19.80 per kilo, if quantitative restrictions (QR) are lifted and are substituted by “moderate” tariffs.

If quantitative restrictions were eliminated and rice imports were allowed to freely enter the country, rice imports would have increased ten-fold,” authors Roehlano Briones and Beulah de la Peña said, which would consequently result into rice prices cut in half.

Based on the research, under a scenario where rice can be traded freely, total rice imports could reach 4 million metric tons. Basic economics would imply that the excess supply would therefore bring down rice prices to about P17.66 per kilo.

The study said high rice prices in the country can be attributed to the government’s action to self-sufficiency.
Local farmers “can do it, but you have to pay them a much higher price than what is available in the world market.”

However, the supply-driven decrease in rice prices would result to a P34 billion loss to producers, and a P6-billion drop in importer’s revenue. Given the repeal of the QR, producer surplus can be unfavorable to local farmers. A way to address this issue is to “apply a moderate level of tariff, thereby striking a compromise between the benefits to consumers and the losses to producers.” said the study.



 

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