By: Ted C. Mendoza 

The decline in the price of palay (unmilled rice) is a serious issue faced by our farmers. Currently, the price of palay is only ₱8/kg, resulting in a massive loss of income for farmers—amounting to over ₱250 billion.

This is four times greater than the damage caused by the Super Typhoon Yolanda in 2012. This is not merely a market failure; it is a policy-induced disaster rooted in the structural flaws of the Rice Tariffication Law (RTL).

Enacted in 2019, RTL dismantled the National Food Authority’s (NFA) market intervention powers, liberalized rice imports, and exposed Filipino farmers to global price shocks without adequate safeguards.

Despite amendments tripling the Rice Competitiveness Enhancement Fund (RCEF) to ₱30 billion, the law remains irreparable. Its design privileges importers, weakens domestic production incentives, and undermines national food sovereignty.

A new law is urgently needed—one that restores the dignity of farmers, embeds climate resilience, and reclaims rice as a pillar of Filipino self-reliance.

That law is the proposed Rice Industry Sustainable Development Act (RISDA).RISDA is not a mere policy tweak; it is a systemic overhaul.

It integrates economic, ecological, and institutional reforms to rebuild the rice sector from the ground up. At its core is a commitment to guaranteed procurement, price stabilization, and farmer empowerment.

Under RISDA, the government shall purchase a minimum of 20% of the national palay harvest at a floor price of ₱25/kg—adjusted annually to ensure a 30% net return above production cost.

This procurement mandate is not symbolic; it is a strategic intervention to dismantle rice trader cartels and restore market fairness. Drawing lessons from India’s Minimum Support Price (MSP) system and Thailand’s farmer price support schemes, RISDA repositions the NFA as a proactive market stabilizer, not a passive logistics agency.

Beyond procurement, RISDA institutionalizes a robust price support mechanism. It mandates the establishment of a dynamic floor price calibrated to grain yield, inflation, and production costs.

This ensures that farmers earning 5 tons per hectare receive a net income of ₱50,000 per hectare per crop—an income floor that reflects both dignity and viability. The NFA is empowered to intervene during harvest seasons, buying palay when market prices fall below the threshold, thereby shielding farmers from predatory pricing.

Moreover, RISDA introduces a rice import parity clause: importers must purchase 60% locally grown rice for every 40% of their import volume.This creates competitive demand for domestic palay and curbs speculative importation.

To prevent price manipulation and hoarding, RISDA enforces strict penalties on profiteering, price gouging, and artificial scarcity. Licensed traders must submit periodic inventory reports, and the NFA, in coordination with the Department of Trade and Industry (DTI), will conduct regular market surveillance.

Public price bulletins and digital reporting platforms will empower consumers to monitor rice prices and report violations, democratizing market oversight.

RISDA also revives the quedan system—a warehouse receipt mechanism that allows farmers to deposit palay in accredited warehouses and use the receipts as collateral for low-interest loans. This delays market disposal until prices improve, reducing vulnerability to post-harvest price crashes.

Cooperatives will manage community warehouses, strategically located near production zones, and participate in buffer stock programs. Blockchain-based tracking and third-party audits will ensure transparency and accountability.

Programs for farmers under RISDA go far beyond input subsidies. The proposed law mandates the construction and rehabilitation of irrigation systems, prioritizing rainfed and drought-prone areas.

Solar-powered and gravity-fed networks will be developed, especially in upland and indigenous communities. Post-harvest modernization is central: drying centers, milling facilities, and climate-controlled storage hubs will be built in strategic municipalities, with cooperatives given priority access to equipment grants.

Farm-to-market roads will be geospatially planned, with 10% of the Department of Public Works and Highways (DPWH) budget earmarked for rice-producing regions.

RISDA embeds climate resilience through agroecological transitionIncentives will be provided to farmers who regenerate soil carbon, adopt low-emission practices, and manage local seed banks.

A national hybrid rice seed independence program will be launched, targeting 50% local seed production coverage within four years. Research institutions and state universities will collaborate with farmer-led organizations to develop climate-resilient varieties, biological pest control systems, and diversified cropping models.

Innovation hubs will be established in major rice provinces to support decentralized, participatory research.

To ensure strategic foresight and policy coherence, RISDA creates the National Rice Sustainability Council (NRSC)—a multi-sectoral body composed of government agencies, farmer cooperatives, academics, civil society, and local governments.

The NRSC will develop a National Rice Industry Roadmap, harmonize efforts across stakeholders, and monitor rice production, supply, and food security status.

Subcommittees on agroecology, seed systems, market development, and data systems will provide technical depth and ensure evidence-based policymaking.

RISDA’s buffer stock policy is aligned with international best practices. A 90-day rice reserve will be maintained to safeguard against supply disruptions, price volatility, and emergencies.

Regional reserves will be established in disaster-prone areas, and replenishment will prioritize domestic procurement. Responsible importation may supplement stocks when necessary, but never at the expense of local farmers.

Funding for RISDA will be sourced from the General Appropriations Act (GAA), with a recommended allocation of 10% of the national budget for rice sufficiency, as advised by the UN FAO.

Government corporations will be mandated to buy palay at the guaranteed floor price, ensuring a minimum 30% net return above production cost.

Investments in agricultural R&D, climate-resilient infrastructure, and cooperative capacity-building will be scaled up to secure long-term food sustainability.

In sum, RISDA is a forward-looking, systems-based reform that redefines rice governance in the Philippines. It corrects the structural failures of RTL, restores the procurement mandate of the state, and embeds farmer dignity, youth empowerment, and climate resilience into national policy.

It draws lessons from Asia’s leading rice producers—Vietnam, Thailand, India, Pakistan, and China—while rooting its architecture in Filipino realities. RISDA is not just a legislative proposal; it is a moral imperative and a strategic necessity. The time to act is now.

(Teodoro Ted C. Mendoza PhD is a retired professor and UP scientist of the Institute of Crop Sciences at the University of the Philippines Los Baños)

Published Date: October 2, 2025