30/04/2025
Policy Position: Why the ₱20/kg Rice Program May Harm, Not Help, Filipino Farmers
By RiceUp Farmers, Inc.
May 1, 2025
The Marcos administration’s plan to offer rice at ₱20 per kilogram, while aiming to alleviate food insecurity, raises significant concerns regarding its long-term impact on Filipino farmers. Here’s why this initiative might be more detrimental than beneficial to the agricultural sector:
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1. Historical Precedents Highlight Risks
Past programs like Masagana 99, introduced in the 1970s, aimed to boost rice production through subsidies and credit schemes. Initially successful, the program eventually led to widespread farmer indebtedness and the bankruptcy of approximately 800 rural banks. By 1980, only 3.7% of small rice farmers benefited, with many left in debt and the program criticized for favoring wealthy landowners and becoming a vehicle for political patronage .
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2. Subsidies May Distort Market Dynamics
A recent panel regression study analyzing agricultural subsidies in Southeast Asia found that such subsidies can have a significant negative impact on rice productivity. The study suggests that subsidies may lead to inefficient resource allocation and market distortions, hindering productivity increases. While subsidies can help maintain price stability, their adverse effects on productivity raise concerns about long-term sustainability .
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3. Over-Reliance on Imports Undermines Local Farmers
The Rice Tariffication Law (RTL) of 2019 liberalized rice imports, leading to a surge in imported rice and a significant drop in farmgate prices. Filipino farmers reportedly lost an estimated ₱90 billion in the first year of RTL’s implementation, with many earning barely half the cost of living. This over-reliance on imports has made local farmers vulnerable, pushing many toward poverty and threatening the country’s agricultural sustainability .
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4. Inefficiencies in Government Support Programs
Studies evaluating government services to rice farmers in the Philippines highlight critical shortcomings in service delivery, particularly in responsiveness and the quality of physical inputs. Farmers have emphasized the pressing need for more reliable, accessible, and higher-quality resources to improve productivity. Without addressing these systemic issues, subsidy programs may fail to provide the intended support to farmers .
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5. Financial Sustainability Concerns
The proposed ₱20/kg rice program is projected to cost the government between ₱10 billion to ₱12 billion for its initial rollout, with plans to expand nationwide by 2028. Given the government’s existing budget deficit, sustaining such subsidies could exacerbate fiscal pressures. Additionally, the National Food Authority (NFA) is expected to sell rice at a loss, translating to significant financial strain .
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Conclusion
While the intention behind the ₱20/kg rice program is to make rice more affordable for consumers, the potential long-term consequences for Filipino farmers are concerning. Historical precedents, market distortions, over-reliance on imports, inefficiencies in support programs, and financial sustainability issues all point to the need for a more holistic approach. Supporting farmers through investments in infrastructure, access to affordable inputs, and training to improve productivity may offer more sustainable solutions than price subsidies alone.
