THE Los Baños-based International Rice Research Institute (IRRI) recently released a policy brief on the impact of the Middle East war on rice prices in key Asian countries (Bangladesh, Cambodia, India, Indonesia, Myanmar, Philippines, Thailand and Vietnam) and recommended measures on how they should respond to the challenges brought by the conflict.
Titled “Stressed Margins and Rice Affordability: Price and Policy Signals” (IRRI Global Rice Market Brief Series - Issue #12 -June 2026), it proffered a number of policy recommendations distilled from an examination of empirical data. The study was authored by two of IRRI’s in-house agricultural economists, Alisher Mirzabaev and Valerien Pede.
The main concern was how to ensure reasonable farmgate prices for palay farmers while maintaining affordable rice prices for consumers. Balancing these two objectives is difficult enough. The economic crisis brought about by the war in the form of high fuel and fertilizer prices aggravates the dilemma faced by policymakers on how and where to strike that balance.
The authors observed that energy and fertilizer price shocks differentially impacted each country’s domestic rice value chains. They noted that “in some countries farmers bore the adjustment; in others, wholesalers and millers became the pressure valve; in others retail prices were insulated by governments.”
In the cases of Indonesia, Myanmar and the Philippines, they found that the rise in input costs outpaced price increases at the farmgate and wholesale levels, squeezing profit margins at these two points of the value chain. This does not seem to be happening in Thailand and Vietnam, which experienced moderate pressure from the energy and fertilizer price increases.
While there was a letup in the global fuel and price increases during the study period, they noted that domestic input prices did not decline commensurate to that for world prices. And while rice prices remained low and stable during the first quarter when the war erupted, the trend is now starting to change. They reported that by May and June, the Food and Agriculture Organization noted that rice prices had begun to rise.
Global rice harvest surpluses late last year and early this year lulled policymakers in rice-importing countries that there would be adequate supply available even with a protracted war. Prices remain relatively stable for consumers in the region and thus there was no sense of urgency in building stocks given the perceived ready availability of the grain from the world market.
The authors warned about this because stable retail prices do not mean the presence of a healthy market. They warned that “retail stability can coexist with farmer distress and trader losses.” They suggested that the policy objective is to attain an “overall viable value chain, not the suppression of one visible price” at the expense of the others.
To attain this, their recommendations are as follows: One, “monitor and transparently communicate rice value chain margins. This entails regularly publishing a dashboard monitoring farmgate, wholesale and retail prices, import parity, fuel and fertilizer prices and sales, exchange rates, port and transportation costs, public and private stocks and mill utilization.”
Two, “protect production capacity without freezing price signals. This means that when input costs rise while farmgate prices stagnate or fall, time-bound and targeted subsidies should be administered like input e-vouchers, seasonal credit, diesel support for irrigation and transport, fertilizer use-efficiency advisory services and working capital for small millers.”
Three, “make trade policy predictable such as announcing in advance import calendars, tariff bands, licensing rules and government-to-government purchases. This will allow contracts and shipping plans to adjust more smoothly. Abrupt changes can raise uncertainty premiums, freeze private trade and widen the very wedges that policy is trying to close.”
Against such science-based recommendations, the Samahang Industriya ng Agrikultura (Sinag), purportedly a farmers’ organization, is recommending higher tariffs on rice and other agricultural and food commodities imports. It argued that higher tariff would protect our cultivators and encourage them to become more productive because of better prices.
The problem is that for rice, an import ban existed for more than 50 years and yet productivity gains were hardly felt. When a 35-percent tariff substituted for the outright import ban starting in 2019, it did not also lead to significant palay productivity increases.
In fact, our palay productivity lagged behind Vietnam, Indonesia and now even India. As noted before, a Congressional Planning and Budget Research Department study showed that while the rice budget significantly rose during the past two decades, our rice self-sufficiency ratio declined to just over 70 percent.
The sad fact is that Sinag’s proposal of a higher tariff or import ban is typical of populist sentiment that is mostly based on anecdotal and incidental evidence. This can be noticed in Congressional hearings whenever Sinag and other so-called farmers’ groups serve as resource persons. They often talk about their personal experiences, cite some supportive stories and appeal to emotional issues sans any systematic presentation of empirical evidence.
One will hardly see any chart or table to prove that what they are claiming is supported by solid data from official and reputable sources. They cannot demonstrate that the current trend of low prices experienced by our tillers is a permanent feature of the market requiring protection through import bans or higher tariffs.
It is as if agricultural policymaking in the country should be based on emotional appeal and popular conceptions rather than scientific study. This is precisely the reason why our agricultural sector in the rut. On the other hand, it might be good for their business or ideology to keep it that way.
