THE MUNICIPALITY OF GUIMBA HAS 15,000 HECTARES DEDICATED TO RICE PRODUCTION, THE LARGEST LAND AREA FOR RICE IN THE COUNTRY. THE AGRICULTURE DEPARTMENT CLAIMS 99% OF FIELDS IN GUIMBA ARE IRRIGATED. PHOTO: LEILANI CHAVEZ FOR PCIJ

SAN JOSE CITY — Rice miller Marivic Violago-Belen was on the stairs of her family’s home in San Jose City, Nueva Ecija when she closed a palay deal worth hundreds of thousands of pesos at P31 per kilogram. She was at ease, relieved she could increase the warehouse’s rice stocks to meet deals signed with the country’s top food chains. 

By the time she reached the second floor, her phone rang again. A different person called with a new price: P31.50/kg. “Ma’am, the P31/kg you haggled is now P31.50/kg. Can you match this?” was the prompt question, she recalled.

“I was talking to an agent by the way, not my agent, a different one… and he asked: Will I take it? I said I would gauge the situation,” Violago-Belen told the Philippine Center for Investigative Journalism a few minutes after the call. 

Umakyat lang ako, umakyat na rin ang presyo!” (I just went up and the prices already went up by 50 cents!)

Nueva Ecija is the country’s rice granary and Violago-Belen runs Joseph Rice Mill, a key player in the province’s — and even the country’s — rice industry. 

The Violago family has been milling rice since 1965, building a fortune and a political capital that allowed patriarch Eleuterio Rueda Violago to win a seat in the House of Representatives in 1992. Family members have held onto that seat since then.  

Violago-Belen also dabbled in local politics. She replaced her husband Alexander Belen as city mayor in 2007, and served for three terms. She reveled in the post, bringing the city close to winning the Seal for Good Governance in 2013 and 2014. 

In 2017, she returned to the milling business to face an industry whacked by waves of inflation, erratic monsoons, and supply shortages.

“Ang sakit ng ulo ko nung bumalik ako sa rice mill,” she recalled. (Returning to the rice mill was a big headache for me.)

In its heyday, huge rice mills like Joseph Rice Mill dictated market prices in Nueva Ecija. But the industry shrank and new players emerged, each battling to earn from the once lucrative value chain.

While competition spikes, the industry remains a “buyer’s market,” said Catalino Obinario Jr., chair of the Cooperative Enterprise for True Economic Reform (CENTER), the largest farmer cooperative in Guimba town, Nueva Ecija. 

It’s dictated less by producers and more by the market, Obinario told PCIJ.

Ako ay second-generation farmer at never naman kaming nagdikta ng presyo,” Obinario said.

Kami [Farmers] ay laging pumapayag sa natatanggap naming alok ng mga buyers. Never naman kaming nagdikta. It was never a supplier market,” he said, adding that big millers are the ones who do so.

(I’m a second-generation farmer and we never dictated farmgate prices. We always accept the price offered to us by buyers. We never dictate prices. It was never a supplier market.)

Violago-Belen, however, maintained that prices depend on supply and demand. But as the country grapples with a palay shortage, she said, another player is calling the shots: Agents.

Agents help farmers sell their palay stocks immediately. They don’t have to look for buyers, Obinario said. But agents can also freely manipulate prices. “’Yun ang sipa nun,” he said. (That’s the clincher.)

The shortage season had agents wearing different hats. They were once grain evaluators, but the situation in the industry had them becoming brokers, bid managers, price setters—and even gatekeepers for palay. Their practices have earned them notoriety among traders, millers and farmers in Nueva Ecija.

The PCIJ conducted interviews across industry players in Nueva Ecija to trace the rice value chain here. We found that while their role should have been limited to linking farmers with traders, farmers with millers, and even traders with millers, these agents have played a hidden hand in pricing.

During peak harvesting season, the air in Guimba smells of cut stalks, sweat, and sunshine. Golden, bursting rice stalks cover hectares upon hectares of fields and men scurry to load sacks of palay to ten-wheel trucks that ply the main highways day and night. Every part of town is a hub of trade and economic activity. 

The municipality has 15,000 hectares dedicated to rice production and 99% of this is irrigated, according to the Department of Agriculture. Guimba made Nueva Ecija the country’s rice granary and the synchronized planting practiced here ensured high yields every cropping season.

Ang pinakamataas sa Guimba umabot ng 14 tons per hectare per cropping. Tapos ang national average ay 4.5 tons per hectare — papayag ka ba na ganun ang ani mo? (The highest yield in Guimba is 14 tons per hectare per cropping season. The national average is 4.5 per hectare–are you going to accept you only harvest this much?)” Obinario said.

Guimba’s per hectare yield should be around 200 to 400 sacks of palay weighing 50-60 kg each.

A MAN HIRED TO WATCH OVER A ONE-HECTARE RICE FIELD IN GUIMBA, NUEVA ECIJA. LAND-OWNING FARMERS DO NOT ALWAYS DO HIS OR HER OWN FARMING. SOME OPT TO HIRE LABORERS WHO WILL SOW THE SEEDLINGS AND A DIFFERENT SET OF LABORERS TO WATCH OVER THE FIELDS. PHOTO: LEILANI CHAVEZ FOR PCIJ

The scale of output is burdensome for farmers who lack warehouses or post-harvest machinery. It’s common practice among farmers here to keep 10-15 sacks for personal consumption and sell the rest. Fresh palay is commonly traded but costs less than their dry versions.

Habang andyan kasi ang palay mo, meron ka pang gastos…. Kaya kailangan mabenta mo kaagad (As long as farmers hold on to their palay, they are incurring losses. That’s why you should sell it immediately),” Redentor Barcelita, a farmer in Guimba, told PCIJ.

Agents flourished in this market dynamics; they seek farmers before or during harvest day and link them up with buyers.

Ang tawag nga dito agent nga naman. Ito ‘yung mga naghahanap ng mga palay kung saan meron at binebenta kung saan may nangangailangan,” Orly Manuntag, spokesperson of the Grain Retailers Confederation of the Philippines (GreCon) and co-founder of the Philippine Rice Industry Stakeholders Movement (PRISM), told PCIJ.

Manuntag explained: “Para siyang broker, nagtatahi ng dalawa — ng buyer at seller. Hindi naman kilala ni farmers kung sinong bibili. Hindi naman kilala ni miller or palay trader kung na kanino yung palay. So ang nagtatrabaho dun, si agent.”

(They are called agents. They are the ones who scout for farmers who are selling unmilled grains. They act like brokers – they connect the two: buyers and sellers. Farmers don’t know who will buy unmilled grains. On the other hand, miller or traders don’t know who will harvest their crops. The one who works here is the agent.)

Richard Soliman started his rice trading business as an agent. Soliman invested in a small milling machine in 2009 and hired laborers to dry palay in a gated one-hectare property. He supplies rice to Nila’s Store, which used to be the largest trading center in Guimba, and to canteens in the town. Soliman is a barangay captain in Guimba and president of the local traders association.  

Mas mabilis ang kita ng agent, hanap ng bibili, ng bebentahan… kasi laway lang ang puhunan, gasolina… [may] kita na,” Soliman said. (Agents earn fast, they look for sellers, buyers… because they just need to be good at socializing, be trusted, have funds for gasoline… they earn.)

Agents have also developed an eye for good grains, he pointed out. Moisture content is a make or break in palay pricing – the drier the better. The ideal is 14% moisture content, but not all grains are grown equally. An agent’s assessment then becomes the starting point for haggling.

Agents add 20 cents to palay prices but this increases with competition, Soliman said. 

DRYING FRESH PALAY ON CEMENTED ROADS ARE BETTER, FARMERS SAY. BUT DRYING ON NATIONAL ROADS HAVE BEEN PROHIBITED BY THE GOVERNMENT. MOST FARMERS IN NUEVA ECIJA SELL THEIR PALAY FRESH TO TRADERS OR MILLERS. PHOTO: LEILANI CHAVEZ FOR PCIJ

Competition on the ground unravels this way: If the buying price is P25/kg, agents will prod their trader to add 20 cents so they can buy the palay—especially if the grain’s quality is good. If traders agree, the price becomes P25.20. Another agent bidding for the same palay will then tell his trader the new amount and ask him to add another 20 cents to steal the palay and clinch the deal. 

“Ngayon si trader maiinis kasi sinusulot… sasabihin [niya kay agent], sige kunin na natin ‘yan. E ‘di si agent, kumita siya ng 40 (centavos),” Soliman said. “Kapag ganun, kumalat na ‘yung presyong ‘yun at hahanapin ng farmers ‘yun.” 

(Now, the trader will be annoyed because another trader is attempting to steal his grains, and will agree to add another 40 centavos. The price is now at P25.40. This price then spreads around and farmers will ask for that rate.)

“Nangyayari po ‘yun. Si farmer naman tuwang-tuwa kapag pinagaawayan yung palay niya kasi kikita siya,” Soliman said. (That happens. Farmer will be happy that agents/traders are fighting over his grains because that means he will get a good price.)

Agents from outside of Guimba will always offer a slightly higher rate to edge out local competition, Soliman said. This is to make sure that they can secure a deal even while incurring additional losses. Paying more is always better than heading to town and returning empty-handed, he added.

Soliman keeps abreast of palay rates in other towns and provinces through his agents. Almost all the traders in Guimba have agents who scour the fields for them. While most agents are paid by traders, some work independently. When working for traders, their commission is included in the P1/kg mark-up traders add to farmgate prices.

A FEW UNMILLED SACKS OF RICE AT CENTER, THE LARGEST FARMERS’ COOPERATIVE IN GUIMBA, NUEVA ECIJA. PHOTO: LEILANI CHAVEZ FOR PCIJ

The government also releases prices every cropping season, Violago-Belen said. But most millers do not follow it since the amount is so low that it will be difficult to compete for good grains. Instead, millers like Joseph Rice Mill release figures that mirror those in  Isabela, the second highest rice producer in the country. 

Isabela harvests earlier than Nueva Ecija, Violago-Belen said, which means that palay prices there could more or less dictate the prevailing price in the market. But Violago-Belen admitted she sometimes keeps their prices secret from agents. 

They use it as a benchmark for pricing – the lowest bid of sorts – which heightens competition over the grains, she said. Competing with smaller players is tough, Violago-Belen said, since these small players have lower overhead costs.

According to Soliman, the set price from large millers comes with a “take it or leave it” policy. Traders like him simply have to comply—and find ways to earn a little.

“Dito sa Nueva Ecija, ang namumuno dito rice mill, yung malalaking rice mill. Kasi sila ang masusunod. Kaming mga traders, magbabagsak sa kanila, kukunin lang nila ng [ganitong presyo] ‘yan. Kung ayaw mo, umalis ka. Ganito dito sa Nueva Ecija, ganun din sa Bulacan. Kaya pagalingan [para kumita],” Soliman said. 

(In Nueva Ecija, rice mills are king – big rice mills, that is. They dictate the price. Traders like us just deliver the palay to them, and they set the price. If you disagree, you’re free to leave. That’s how things work here in Nueva Ecija, the same goes for Bulacan. To make profit, you must be shrewd.) 

But Soliman admitted that prices now are dependent on agents. If prices are more transparent across players, they might rely less on agents, he said.

The Philippine government identified three levels in the value chain: farmgate, wholesale, and retail. Agents, traders and millers are clustered in the wholesaler side, but transactions on the ground in Guimba showed that farmgate prices identified by the Philippine Statistics Authority may be different from the actual amount farmers receive.

Farmgate prices increase by 50% as they make their way to the consumer’s table – that is the rule of thumb in Nueva Ecija. 

During PCIJ’s visit in May last year, fresh Rc160 palay, the special long grain variety Nueva Ecija is known for, was bought from farmers at P24-P26/kg, the highest for the year. Millers like Violago-Belen said the lowest rate she bought from agents during the same season for the same grain was P29. This is a P5/kg difference.

“Nung umabot ng bente ang kilo ng palay, nagulat din kami,” Obinario said. “Palibhasa nasanay sa kinse.” (When palay prices reached P20/kg, we are also shocked. We were used to P15/kg.)

UNMILLED SACKS OF RICE AT CENTER, THE LARGEST FARMERS’ COOPERATIVE IN GUIMBA, NUEVA ECIJA. PHOTO: LEILANI CHAVEZ FOR PCIJ

Data from the PSA shows average farmgate prices in Nueva Ecija were pegged at P24.69/kg for dry fancy palay and P23.33/kg for other dry palay varieties in 2024. 

Since the prices are computed based on dry palay, it’s difficult to determine if Nueva Ecija’s farmgate prices last year were P18/kg or lower. But traders would have earned at least P3/kg for Rc160 last year.

This cropping season, however, farmers expect rates to be around P18/kg for fresh palay since other areas in the province have already opened the harvesting season, Barcelita said.

It’s difficult to trace exactly how much agents, traders, and millers add to the pricing. But among the farmers here, agents have been notorious for bad practices.

“Magtataka ka sa style ng mga agents na ‘yan. Nag-grugrupo sila, [maguusap] tawaran natin ng mataas ‘tong palay ni Ma’am. E ‘di ikaw mabibighani ka ano? Alas-siyete na wala pa,” Obinario narrated.  “Despite the commitment, hindi hahakutin, hindi babalikan. Bakit? Kasi bukas, bulok na ang palay mo, babaratin na namin. May ganun… Meron silang kontak-kontak na.” 

(You’ll wonder at the style of those agents. They group together, offer a high price. You’ll be happy. Then on the day of pick-up, it’s already seven in the evening and they’re nowhere to be seen. Forget about commitment, they’re not going to show up. Why? By the next day, your palay has deteriorated, and they’ll offer you a bargain price.) 

Violago-Belen herself had an experience with an agent who scammed a farmer from Pangasinan last year. 

The agent went to see her and offered to sell palay at P27/kg—the lowest offer she had last year. She made a counter offer of P26/kg and to her surprise, the agent agreed. Still, Violago-Belen decided to not buy the grains. 

She discovered later that the agent used her rice mill to get the farmer’s palay loaded onto vehicles. Local police managed to flag one of the vehicles before exiting San Jose City after getting a call from the rice mill guard. A 10-wheeler, however, got away with P700,000 worth of palay.  

Unlike the other sectors, agents have yet to form a formal association in Guimba, which makes it difficult to engage and monitor them.

Competition over palay has grown as intense as the heat in Nueva Ecija. And agents are keeping the hearth stoked. It’s only a done deal when the palay arrives at the warehouse’s gate, Violago-Belen said. Before that, it’s a game of steal the bacon, or in this case, steal the palay.

“Minsan nga nakapangalan na sa truck ko, nasusulot pa. Nakapila na sa amin, nasusulot pa,” Violago-Belen said. “’Yung mga agents, nagaabangan sila. Pero nagsusulutan sila. Wala ngang business ethics,” Violago-Belen lamented.

(Sometimes, the grains are already assigned to my trucks, but the deal gets stolen from you. It’s already lined up for our warehouse, but then it’s headed somewhere else. Those agents, they watch each other’s transactions but they steal from each other. They lack business ethics.)

UNMILLED SACKS OF RICE AT CENTER, THE LARGEST FARMERS’ COOPERATIVE IN GUIMBA, NUEVA ECIJA. PHOTO: LEILANI CHAVEZ FOR PCIJ

When she managed Joseph Rice Mill before running for mayor, Violago-Belen kept agents strictly off the table. But when she returned in 2017, she turned to them to keep business afloat. Otherwise, she said, she’d miss out on palay buys.

“Ngayon talaga kapag hindi ka umasa sa agent, mahuhuli ka, ang bibilis nila… wala kang mabibili,” she added. (Nowadays, if you don’t have an agent, you’ll be left behind. They are quick—you won’t buy any palay.)

Agents are inevitable players in the trading process, but they might not have huge influence on prices, said Manuntag of GreCon and PRISM. 

“Sa tingin ko, wala. Pero baka meron din silang konting impluwensya. Lalo na kapag pa-lean month season… All over the Philippines, isa ‘yan sa mga factors,” he said, adding that prices will still depend on buyers and sellers. 

(I don’t think they can dictate prices, but they probably have a little influence. Especially when the lean months are approaching… all over the Philippines, that’s one of the factors.)

Rice prices in the capital Manila have always driven the ebb and flow of the market, but if grains are bought even before they are harvested, then the grains will not even reach Manila’s retailers, he said.

“Kaya siya bumaba, tumataas, depende sa market forces sa bawat sitwasyon ng lugar,” Manuntag said. “Ang labanan sa Manila na presyo ng bigas, dun nila (players) dinudugtong. Mabili sa Manila, tinataas nila. Matumal sa Manila, baka bumaba ng konti. Pero kung dun pa lang sa posisyon nila, nagkakabilihan na, dun pa lang ubos na, wala nang darating sa Manila.”

(Prices go up and down depending on the market forces in each area. Players connect prices to competition in Manila. If rice is in demand in Manila, they increase prices. If it’s the opposite, they lower it. But if grains are already bought out in their areas, if the palay is sold-out there, these grains will not reach Manila.)

But the dominance of agents in Nueva Ecija’s rice industry was caused by a much bigger problem: a supply shortage. 

“E kami nga dito mismo nararamdaman namin yun e–nagshoshortage dito,” Obinario said. “Ang indication niyan yung… nag-aagawan sa palay na may direktang epekto sa presyo.” (We feel that here–there’s a shortage here. The indicator is… players are fighting over unmilled rice grains which directly impacts prices.)

While the Department of Agriculture reported a decrease in palay production last year, officials deny a rice shortage as the reason for declaring a food security emergency last month. However, players interviewed separately by PCIJ have pointed out there is a palay shortage as of mid-2023 – even before India pulled the brakes on exports.

Some areas have produced lower yields by as much as 20%, Violago-Belen said. Some fields have also been transformed into residential areas or commercial hubs. 

“Nagmimiting kami (kasama ang mga taga-Department of Agriculture)... nung June (2023) sinabi na namin (millers, wholesalers) na mukhang magkakaproblema sa supply,” Violago-Belen recalled. The government assured them that supply will be stable since satellite images promise an increase in yields, she added. 

“Hindi ko alam kung totoo yung data nila. Meron silang sinabing satellite. Sabi ko nga baka kapag satellite ang tinignan niyo, kapag nakuha yung palay wala namang laman,” Violate-Belen said. (I’m not sure of their data is correct. They talk about a satellite. I was thinking… satellite images might not be enough because if you harvest the palay it might be empty.)

Violago-Belen clarified the shortage is on palay supply, not on milled rice since current laws allow private entities to import rice. But the state of palay supply has placed agents at the forefront of pricing.

“Nangyayari lang naman ‘yan ngayon kasi kulang talaga ang palay. Pero kung normal ang lahat ng supply, madi-disregard sila—andun pa rin ang agent pero not to the point na singkwenta sentimos per kilo [ang dagdag ng presyo],” Violago-Belen said. — PCIJ.org

Armi Carranza contributed to this report