Magic Sword!

‘SUGGESTED RETAIL PRICE’ ENDS

RICE HOARDING, SPECULATION

By Manny Piñol

The implementation of the Suggested Retail Pricing (SRP) Program in the rice industry is now considered the “Magic Sword” which has effectively slain a two-headed monster which preyed on consumers for ages now – Rice Hoarding and Market Speculation.

These are the two major problems in the past which resulted in the volatility of prices and instability of supplies in the market.

Traders and even big-time retailers adjusted the selling prices of rice when they felt that the supplies were limited, especially during the lean months of June, July and August.

This was precisely what happened this year, when the absence of the government-subsidized rice sold by the National Food Authority (NFA) in the market resulted in a spike in the prices of commercial rice, both local and imported.

The prices went up as high as P70 per kilo for Premium Imported Rice, the same rice which is now sold at no more than P43 per kilo.

There was simply no way government could have regulated the prices as there were no numbers to use in setting the fair price.

When the SRP was introduced, the production cost of the farmers were taken into consideration as the basis for the determination of the SRP.

For Imported Rice, it was determined by validating the landed cost.

By assuming that the farmer would fairly earn with a base price of between P19 to P22 per kilo for farm fresh palay, the SRP for regular milled rice was set at P39 per kilo, well-milled at P44 per kilo and Premium Grade at P47 per kilo.

Computing the landed cost of Imported Rice, including incidental expenses because of the delay in the unloading of the rice, Well-Milled Imported Rice price was set at P39 per kilo and the Premium Grade at P43.

Only Special Rice varieties like the Organic Black, Red and Brown Rice, Cordillera Heirloom Rice, Jasmine or Milagrosa, Dinorado, Hinumay, Kamoros, Malido and other indigenous rice varieties are exempted from the SRP implementation.

By setting prices for the different milling grades of rice sold in the market, no trader in his right mind now will hoard his rice stocks in his warehouse and wait for the prices to go up.

While the SRP numbers are not constant and could be adjusted from time to time, the system effectively sets a cap on prices during a specific period.

Farmers, on the other hand, now have a basis in determining how much their palay should be fairly priced.

Added to that, the NFA Buying Price of P17 plus P3.70 incentives per kilo stabilizes the buying price of the farmers produce.

#KungGustoMaramingParaan!

#Changeishere!

(Photos were taken during the launching of the SRP Program in the Commonwealth Market in Quezon City last Saturday by Mayette Tudlas, DA OSEC)