Fluctuating

Bless you, Sec. Francisco Tiu Laurel.

The Agriculture secretary just announced his department is not at all considering imposing suggested retail prices (SRP) or price caps for rice. Some sanity appears to have descended on this matter.

A few days earlier, the DA spokesman Arnel de Mesa confidently announced SRPs for rice next week. The man was out to terrorize the market.

Laurel corrected that announcement in no uncertain terms: “We are not doing it. Prices of rice and other agricultural products in international markets like Thailand and other countries are volatile and fluctuating due to El Niño. Hence we are not suggesting to control prices at the moment.”

Last year, government imposed price caps on rice. The results were disastrous. Taxpayer money had to be shelled out to compensate small retailers who lost money because of the imposition of price caps.

The imposition of SRPs on rice would fail in the same manner. It will merely produce uncertainties in domestic rice supply as traders avoid importing the quantities we need. Rice purchased at prices higher than the SRP will be withdrawn from the market to avoid business losses. The staple commodity might have to be rationed even as we harvested an unprecedented amount this year.

You know this aphorism: If all you have is a hammer, every problem will resemble a nail.

Price control is a hammer. It is all our agriculture bureaucrats have in their toolbox after they fail to ensure supply stability.

A hammer is a blunt instrument. It cannot possibly solve all the complexities surrounding a basic and politically-charged commodity.

It is probably inevitable that rice prices will continue to rise this year. Droughts are expected. Weather conditions could be so severe crop failures might happen. With all the volatility expected, the worst any government could do is to erect a price barricade. That is like driving a nail through our own skulls.

When the braindead decision was taken last year to impose price caps on rice, a talented young economist serving as undersecretary at the DOF subtly warned everyone about the law of supply and demand. She was terminated. Morons do not have the ability to tolerate expert