NAAWAN, Misamis Oriental (MindaNews / 6 September) – President Ferdinand (Bongbong) Marcos Jr.’s (PBBM) Executive Order (EO) 39, which caps the retail price of rice, is an admission that all is not well on rice in the market. The EO aims to counter the manipulation and control of the price of rice in the market by cartels, smugglers and hoarders, the price of which has already reached P55/kg for regular milled rice and as high as P68/kg for well-milled rice.
Thus, the price cap at P41/kg for regular milled rice and P45/kg for well-milled rice, which was implemented nationwide beginning Tuesday, September 5.
It looks like Mr. Marcos has worsened rather than solved the problem with the measure. Rice retailers are complaining that the caps are far below their acquisition cost. To remain in the business is a losing proposition. Yet, they have certain stock that has to be disposed forcibly on the capped prices to avoid ruin. They have to do it to escape graver losses – stock ruin or confiscation, and the violation penalties.
Marcos apparently understands the predicament of rice retailers and has announced to give them ayuda or subsidy if only to remain in business.
But is this stop-gap measure doable? Has the government made a census to determine the number of rice retailers across the country to receive a cash ayuda? This is likely another mission impossible.
Marcos Jr. is quick in a draw, that is, to open his mouth before opening his mind. It is doubtful that his ayuda, if ever pursued, will reach a sizable target; it might sizzle to nothing along the way to corruption.
The price cap creates a domino effect. Millers currently buy palay from farmers at P22 – 26/kg. To compensate for loss of profit due to the price cap they may drop the buying price to P20-18/kg to the great disadvantage of the farmers. As always, the farmers are always at the losing end in unwise government intervention.
PBBM is aware that the cartel and rice hoarders are responsible for the market anomaly of rice. The sensible thing to do is to run after them, tapping the NBI (National Bureau of Investigation) and all state security forces, confiscate their hoards and flood the market with the same. Surely, the price of rice will go down steeply to even as low as P20/kg. Voila! This fulfills his election campaign promise nary sweat all.
(MindaViews is the opinion section of MindaNews. William R. Adan, Ph.D., is retired professor and former chancellor of Mindanao State University at Naawan, Misamis Oriental)