THE chairman of the House Committee on Ways and Means has warned against possible rice price increases over the coming months as Vietnam, the country’s main source of imported rice, suffers rice supply pressures.
With this, House Committee on Ways and Means Chairman Joey Sarte Salceda recommended that the mechanization component of the Rice Competitiveness Enhancement Fund (RCEF) under the rice tariffication program be rolled out faster to improve farm yields and reduce wastage.
According to Salceda, Vietnamese farmers shift to more high-value varieties of rice while accepting a decline in export volumes.
“The implications of these developments in Vietnam are certain. If we don’t do anything with domestic supply and source diversification, we could see higher rice price inflation,” said the lawmaker in a statement.
Citing the Vietnam Food Association (VFA), Salceda said Vietnam’s rice exports in the first seven months only reached about 3.5 million tonnes, down 12.7 percent over the same period in 2020.
“We should never depend on Vietnam’s rice exports for our supply in the first place. Vietnam is a society that is becoming more affluent. The result of higher purchasing power is greater food consumption. That means fewer volumes available for export,” Salceda said.
Salceda noted that Vietnam’s Ministry of Agriculture and Rural Development (MARD) also showed rice prices rising in the first seven months of 2021, although with limited supplies due to the ongoing health crisis.
“Part of what keeps inflation tame despite higher meat and transport prices is because rice inflation is actually negative in some cases. Average rice prices in August declined by 0.4 percent year-on-year. Imagine what happens to inflation when that ticks up even just a bit. The poor spend around 20 percent of their income on rice,” Salceda said.
Salceda said the government should fast-track the RCEF programs to respond to these developments.
“Last quarter, the Philippine Center for Postharvest Development and Mechanization (PhilMech) completed the implementation of the mechanization component, which is 50 percent of RCEF, just for 2019 and 2020. So, they were actually catching up on a backlog early this year,” Salceda said.
“[Agriculture] Secretary [William] Dar is responding very proactively to the rice situation. With faster implementation of RCEF, we are poised to see the largest harvest of rice next year. We are also diversifying our imports to include Pakistan and India. But we can definitely push harder,” he added.
Meanwhile, Salceda said he will continue to push for land consolidation with land condonation as a complementary policy to mechanization.
“Farm mechanization works best when you are dealing with big-enough tracts of land. It’s cost efficient that way. I filed House Bill No. 9955 which would increase the landholding limit to 24 hectares; promote investments in the agriculture sector by condoning the loans of agrarian reform beneficiaries [ARBs], which will allow more productive use of agrarian reform land to sale, lease, or joint venture with farmers; and open a low-interest loan facility to help farmers repurchase mortgaged agrarian reform land,” Salceda said.