Addressing the Rice Price Crisis in the Philippines: Impacts on Farmers and Policy Solutions

Executive Summary

The Philippines, one of the world’s largest rice importers, is grappling with a multifaceted rice price crisis that threatens the livelihoods of millions of farmers and exacerbates food insecurity among its population. Despite the Rice Tariffication Law (RTL) of 2019, which aimed to stabilize rice prices through liberalized imports, local farmers face declining farmgate prices, soaring input costs, and competition from cheap imported rice, primarily from Vietnam and Thailand. Retail rice prices have fluctuated, with a reported drop to ₱44.45/kg for regular-milled rice in April 2025, yet farmgate prices have plummeted to ₱20.69/kg, a 17% year-on-year decline, against production costs of ₱12–15/kg. High fertilizer costs (₱1,800/sack), climate vulnerabilities, and policy missteps have compounded the crisis, pushing 33% of the nation’s 2 million rice farmers—among the poorest Filipinos—deeper into poverty. This article analyzes the causes and impacts of the crisis, evaluates the role of ASEAN trade agreements, and proposes a comprehensive strategy to balance farmer welfare, consumer affordability, and food security.

Introduction

Rice is the dietary staple for over 110 million Filipinos, accounting for 13–30% of household budgets, particularly for the poor. The agriculture sector, employing 22–30% of the workforce (approximately 11–12 million people), is the backbone of rural economies, yet Filipino rice farmers face unprecedented challenges. The Rice Tariffication Law (Republic Act No. 11203), enacted in 2019, liberalized rice imports by replacing quotas with tariffs, leading to a record 4.68 million metric tons (MT) of imports in 2024. While intended to lower consumer prices, this policy has depressed farmgate prices, reduced farmer incomes, and increased reliance on imports, particularly from ASEAN countries under the ASEAN Trade in Goods Agreement (ATIGA). Compounded by rising fertilizer costs, climate shocks, and logistical inefficiencies, the crisis demands urgent, multifaceted solutions. This article explores the crisis’s roots, its impact on farmers, and actionable policy recommendations to restore agricultural sustainability and equity.

Causes of the Rice Price Crisis

1. Impact of the Rice Tariffication Law (RTL)

The RTL replaced quantitative restrictions on rice imports with a 35% tariff (reduced to 15% in 2024 via Executive Order 62), allowing private traders to import unlimited rice. This led to a surge in imports (4.68 million MT in 2024, primarily from Vietnam), flooding the market and depressing farmgate prices to ₱20.69/kg in January 2025, a 17% drop from 2024. Meanwhile, retail prices for regular-milled rice fell to ₱44.45/kg in April 2025 from ₱51.25/kg in 2024, benefiting consumers but squeezing farmers’ margins, as production costs remain high (₱12–15/kg). The Rice Competitiveness Enhancement Fund (RCEF), funded by tariff revenues (₱30 billion/year until 2031), aims to support farmers through mechanization, seeds, and training, but delays in distribution and limited reach exclude many small-scale farmers, exacerbating their financial distress.

2. High Input Costs

Fertilizer prices have nearly doubled, reaching over ₱1,800/sack in 2025, driven by global supply chain disruptions and rising oil prices, exacerbated by geopolitical tensions (e.g., Iran’s threat to close the Strait of Hormuz). Labor and irrigation costs further inflate production expenses, while farmers’ reliance on traditional methods limits yields (4.1 tons/ha vs. 5.8 tons/ha in Vietnam). These high costs, combined with low farmgate prices, result in minimal or negative profits, trapping farmers in a cycle of debt and poverty.

3. Competition from Cheap ASEAN Imports

Under ATIGA, the Philippines benefits from low tariffs (15% in 2024) on rice from Vietnam and Thailand, which export rice at $434–452/MT. Even with shipping ($25–32/MT) and tariffs ($67.50/MT at 15%), imported rice costs ~₱27/kg, competitive with local retail prices (₱38–50/kg). Vietnam’s efficient, large-scale production and proximity keep import costs low, undercutting local rice despite high production costs in the Philippines. This dynamic, enabled by the RTL, prioritizes consumer affordability but undermines local farmers, as seen in Nueva Ecija, where many farmers faced bankruptcy post-RTL due to price drops.

4. Climate Vulnerabilities

The Philippines’ susceptibility to typhoons, El Niño, and La Niña reduces rice yields by 10–15% annually, with 2024 production dropping to 20.10 million MT from 20.44 million MT due to weather shocks. Super Typhoon Enteng in 2024 caused ₱2.2 billion in agricultural damage, affecting 59,000 farmers. Without adequate disaster aid, farmers like those in Bicol, where 90% of rice farms were damaged, struggle to recover, further reducing local supply and increasing import reliance.

5. Structural and Policy Challenges

• Landlord Dominance: A small elite of landlords and middlemen (86,000 wholesalers, 12,000 millers) control distribution, imposing farmgate prices at half the retail value, exploiting smallholder farmers.
• Logistical Inefficiencies: Poor rural infrastructure raises transportation costs, making local rice less competitive than imported rice, which benefits from efficient ASEAN logistics.
• Policy Misalignment: The government’s focus on consumer price stability (e.g., price caps, tariff cuts) conflicts with farmer welfare, as seen in the National Food Authority’s (NFA) limited procurement capacity (870,000 MT target in 2025) and delayed RCEF aid.

Impacts on Filipino Farmers

The rice price crisis has severe consequences for the 2 million rice farmers, particularly the 33% classified as the poorest of the poor:

• Economic Hardship: Declining farmgate prices (₱20.69/kg) against high production costs (₱12–15/kg) result in net returns dropping by 40.3% (₱13,296/ha) since 2019, pushing farmers into debt. In Oriental Mindoro, farmers like Alex Quinones reported no harvests in 2024 due to drought, forcing some to take up jobs like street sweeping.
• Poverty and Displacement: The National Federation of Peasant Women estimated ₱90 billion in farmer losses in the RTL’s first year, with many in Nueva Ecija going bankrupt. The average farmer age (57–59) reflects a lack of young entrants, as farming becomes unviable.
• Social Unrest: Growing frustration, evidenced by a 39% approval rating for the Marcos government in Metro Manila (OCTA Research, February 2025), signals discontent among rural and working-class communities.
• Food Insecurity: Reduced local production and reliance on imports expose the Philippines to global supply shocks, such as India’s 2023 rice export ban or Vietnam’s price surges, threatening long-term food security.

Policy Recommendations

To address the rice price crisis, protect farmers, and ensure food security, the Philippines must adopt a multifaceted strategy balancing farmer support, consumer affordability, and compliance with ASEAN trade obligations. The following recommendations integrate insights from government initiatives, farmer advocacy, and regional best practices:

1. Adjust Tariffs Strategically

• Seasonal Tariff Increases: Raise tariffs to 35% or higher during peak harvest seasons (September–December for Vietnam, December for Pakistan) to protect local farmers when supply is abundant, as proposed by the DA. This minimizes market disruption while aligning with ATIGA’s flexibility for sensitive products.
• Gradual Tariff Restoration: Transition tariffs back to 35% by 2026, as suggested by DA Secretary Francisco Tiu Laurel Jr., to avoid abrupt price shocks for consumers while supporting farmgate prices.
• Compliance with ASEAN: Negotiate with ASEAN partners to secure exemptions for rice tariffs during harvest periods, leveraging Vietnam’s 5-year supply pact to ensure stable imports.

2. Reinforce NFA’s Role Without Quotas

• Expand NFA Procurement: Increase thewatchdog.ngo.philippines-rice-crisis-filipino-farmers/ NFA’s palay procurement to 1.5 million MT annually at competitive prices (₱24/kg for dry palay, ₱18/kg for wet palay) to guarantee income for farmers, especially smallholders excluded from landlord-dominated sales.
• Strengthen Buffer Stocks: Release NFA’s 300,000 MT buffer stocks strategically to stabilize retail prices without flooding the market, as done in February 2025.
• Regulatory Oversight: Restore limited NFA authority to monitor import volumes and prevent trader profiteering, addressing concerns raised by Nueva Ecija Representative Rossana Vergara.

3. Enhance RCEF Implementation

• Timely Distribution: Streamline RCEF processes to ensure timely delivery of seeds, machinery, and credit to small-scale farmers, addressing current delays that exclude many from benefits.
• Expand Reach: Include non-cooperative farmers in RCEF programs, as 5 billion pesos annually for equipment has primarily benefited organized groups, per Cathy Estavillo of Bantay Bigas.
• Promote Innovations: Scale up technologies like Carrageenan PGP, which boosts yields by 15–30% and reduces harvest time by 20 days, through partnerships with PhilRice and DOST-PCAARRD.

4. Reduce Production Costs

• Fertilizer Subsidies: Provide immediate, targeted subsidies for fertilizers and promote organic alternatives to counter the ₱1,800/sack cost, addressing the impact of global oil price surges.
• Mechanization and Training: Accelerate RCEF’s mechanization programs (26,000 equipment units delivered by March 2025) and train farmers on high-yield varieties (e.g., PhilRice’s 10 MT/ha seeds) to close the yield gap with Vietnam.
• Climate-Resilient Practices: Invest in PhilRice’s climate risk mapping and sustainable methods like crop rotation and intercropping to mitigate 10–15% yield losses by 2040.

5. Improve Logistics and Infrastructure

• Rural Infrastructure: Invest in farm-to-market roads and storage facilities to reduce post-harvest losses and transportation costs, making local rice competitive with imports.
• Private Sector Collaboration: Partner with conglomerates to enhance storage and distribution, as suggested by the Inquirer, to address supply chain disruptions.

6. Support Smallholder Farmers

• Direct Market Access: Develop DA-DTI market plans to connect farmers with buyers, reducing reliance on exploitative middlemen who impose low farmgate prices.
• Cash Transfers: Use surplus tariff revenues (₱30 billion in 2023) for cash transfers to offset losses, as recommended by The Asia Foundation.
• Co-Financing: Implement local government co-financing (2–3:1 matching funds) to fund irrigation and post-harvest facilities, boosting productivity.

7. Strengthen Policy Oversight

• Legislative Scrutiny: Involve House and Senate oversight committees to monitor RTL implementation, ensuring transparency and accountability, as proposed by the Inquirer.
• Stakeholder Engagement: Consult farmers, as criticized by Raul Montemayor of FFF, to align policies with their needs, addressing the lack of dialogue that worsened the crisis.

Counterarguments and Considerations

• Consumer Price Risks: Higher tariffs or reduced imports could raise retail prices, straining poor households (rice comprises 20–30% of their budgets). The DA’s gradual tariff hike and MSRP scheme (₱45/kg in 2025, targeting ₱43/kg by July) aim to mitigate this.
• ASEAN Trade Obligations: ATIGA’s low-tariff regime limits drastic tariff increases or quotas. Strategic, season-specific hikes and ASEAN negotiations can balance compliance and farmer protection.
• Implementation Challenges: Past corruption in NFA import controls and smuggling (₱98 billion from 1986–2009) highlight risks. Robust oversight and modernized NFA operations can address these.

Conclusion

The rice price crisis in the Philippines, driven by the RTL’s import liberalization, high input costs, ASEAN trade dynamics, and climate vulnerabilities, has devastated farmers while offering limited consumer relief. Strategic tariff adjustments, enhanced NFA procurement, improved RCEF delivery, cost-reduction measures, logistical upgrades, and smallholder support can restore farmer livelihoods, reduce import dependency, and ensure food security. By aligning policies with farmer needs, leveraging ASEAN partnerships, and investing in sustainable agriculture, the Philippines can achieve its 2027 self-sufficiency goal, producing 25–27 million MT annually, and break the cycle of poverty for its 2 million rice farmers.

References

• World Socialist Web Site, March 20, 2025
• Industry Strategic Science and Technology, March 3, 2025
• Reuters, February 3, 2025
• Context by TRF, November 6, 2024
• Department of Agriculture, September 17, 2024
• @kikopangilinan on X (formerly Twitter), August 11–13, 2025
• @georgediano on X (formerly Twitter), August 10, 2025