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Asynch Act Econ

The importation of rice negatively impacts local consumption and palay production, leading to lower prices for local farmers and reduced demand for locally produced rice. The NFA aims to support palay prices with a subsidized price of ₱6 per kilo, but lacks the budget to effectively influence market prices, leaving farmers vulnerable to lower offers from traders. Importing rice contradicts the NFA's goal of supporting local farmers, as it increases supply and undermines their ability to receive fair prices for their crops.
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0% found this document useful (0 votes)
15 views2 pages

Asynch Act Econ

The importation of rice negatively impacts local consumption and palay production, leading to lower prices for local farmers and reduced demand for locally produced rice. The NFA aims to support palay prices with a subsidized price of ₱6 per kilo, but lacks the budget to effectively influence market prices, leaving farmers vulnerable to lower offers from traders. Importing rice contradicts the NFA's goal of supporting local farmers, as it increases supply and undermines their ability to receive fair prices for their crops.
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1.What will be the effect of the importation on the local consumption of rice?

How about on
palay production?

The importation of rice would affect the local consumption of rice negatively. Due to the
import of rice, there would be an increase in supply resulting to a much lower price. This
might seem a good thing for consumers, as they could buy rice at much cheaper prices,
but this just means that the consumption of local rice and imported rice would be cut into
half resulting to a less consumption of local rice. On the other hand, this would greatly
affect the local palay production since having too much supply of rice due to the import
would result to a lower demand for the locally produced rice. As a result, local farmers
might be forced to sell their rice at a much cheaper price.

The import of rice may affect the whole rice production of the country, this might
discourage the local farmers to plant more rice on the future and could lead to a much
big problem for the country.

2.How does NFA intend to raise the price of palay to its targeted support price level?
The NFA intend to raise the price of the palay to support local farmers by setting a
subsidized price of ₱6 per kilo. However, due to lack of budget of NFA, they couldn’t buy
enough palay at the subsidized price to influence market prices effectively. Instead, the
NFA uses this price as a guideline or ceiling, intending to let traders and the farmers to
know what a fair price should be.
This did affect the local farmers a lot due to a lot of supply, a lot of traders take
advantage of the situation by offering lower prices to local farmers. On the other hand,
the local farmers had no choice but to sell their rice at a much cheaper price because
they need to make a living even though the price, they were offered was even below the
production cost of their rice.
3.Is the position to import rice compatible with the intention to support palay prices?
No, the decision to import rice seems contradictory with NFA’s stated goal of supporting
palay prices. With the import rice being introduced to the market and NFA’s lack of
budget to support local farmers for their rice crops, this puts the local farmers in
disadvantage, making it more difficult to get a fair price for their crops due to the higher
supply of rice and lack of support from NFA.
Furthermore, according to data from the Bureau of Agricultural Statistics the shortage
was unlikely to happen since we do produce enough rice and even more than what we
need to consume. This just mean that importing rice from different country was just a
selfish decision from the above the above that could greatly affect the lives of our local
farmers negatively.

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