Even as farmers are demanding that prices of palay be increased from the current P7.50 per kilo to P15 per kilo, rice farmers in South Cotabato are complaining of a severe drop in the staple's farmgate price to a low of P4.50 per kilo.

From a high of P10.50 a kilo last month, the buying price for palay in South Cotabato has dropped to P4.50 a kilo, said Reynaldo Legaste, the province's agriculture chief who reported that his office has been bombarded by complaints.

Rod Flores, the chair of the Alyansa ng Magbubukid ng Gitnang Luzon (AMGL) warned that the drastic drop in palay prices in South Cotabato "will surely have a domino effect on other rice-producing regions and provinces."

The Kilusan Magbubukid ng Pilipinas (KMP) and the AMGL blamed the Macapagal-Arroyo administration's policy of rice trade liberalization and the continued importation of rice for the plummeting price of palay (unhusked rice).

KMP chair Rafael Mariano said the abundant supply of rice owing to rice importation and unhampered smuggling has led to the drop in palay prices "to a very insulting and unjust price of P4.50 a kilo."

"Definitely, the impact on our local production is to push palay prices down.  At the same time, it will cause the prices of milled rice rice to go up," said Mariano.

An estimated 800,000 metric tons of foreign rice will arrive in the first quarter of 2003.  This year's imports are pegged at 1.14 million metric tons.

"The peasantry's clamor to raise the support price of palay to P15 a kilo as an immediate economic relief has become more justified," said Flores.

The KMP and AMGL last month launched a signature campaign to support their petition for a government-subsidized increase of farmgate prices of palay up to P15.  They proposed that the National Food Authority buy 90 percent of domestic palay instead of the current 10 percent that the NFA is mandated to buy from farmers.  

The two groups believe that by buying 90 percent of the domestic marketable supply of palay at P15, the NFA could boost the price of palay and stop predatory pricing by private rice traders.

According to their own studies, a farmer with one hectare of land earns only P26.61 a day at the current P7.50 buying price of palay.  It is because the farmer spends P26,104.15 for production and earns a net income of P3,145.85 in one cropping.

Mariano said the farmers' earnings have continued to fall as production costs increase, and palay prices tend to fall during the harvest season.

"Ms Macapagal's subservience to the monopoly dictates of the Agreement on Agriculture of the World Trade Organization (AoA-WTO) should be blamed for the peasantry and the people's economic sufferings," he said.

Mariano warned that the current policy of rice trade liberalization and importation would increase the country's dependence on imported rice, and threaten the country's food security and self-sufficiency.

"We demand that the Macapagal-Arroyo government to increase the NFA's local procurement funds through budgetary allocation, stop NFA privatization, rice trade liberalization ad importation," he said.