(UPDATE) AN agricultural group on Friday warned that the retail price of rice could go up to between P4 and P5 a kilo in October following the delay in the release of government subsidies to farmers.

Jayson Cainglet, executive director of Samahang Industriya ng Agrikultura, said rice could retail between P43 and P44 per kilo from the current P38 to P39 a kilo.

He called for the immediate release of subsidies to rice farmers.

"Farmers lament the fact that it is already the last phase of palay (unmilled rice) production, and they need more fertilizers to increase their yield," he said.

The subsidies include the P5,000 as provided under the Rice Farmers Financial Assistance program under the Rice Tariffication Law; P3,000 for the farmers' fuel expenses under the Department of Agriculture (DA) Memorandum Circular 7; and P1,000 to P2,000 fertilizer discount under DA Memorandum Order 22.

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"Despite the funds were already released by the DBM (Department of Budget and Management) the allocations are still stuck at the DA," Cainglet said.

Without the subsidies, rice farmers will have to bear the brunt of the increasing cost of palay production, he said.

"Such increase would mean a sharp rise in the farmgate price of palay and ultimately the retail price of rice. Very few have received these subsidies," Cainglet said.

In a separate interview with The Manila Times, former Agriculture secretary Leonardo Montemayor said he sees a 10- to 15-percent drop in the palay output amid the high cost of farm outputs.

"I remember last May, former (DA) secretary William Dar already announced that he expects a shortfall in the main harvest of about 10 percent. That is about 700,000 metric tons of palay while my estimate is from 10 to 15 percent as farmers cut down on fertilizer use due to spike in its prices. As a result, it will reduce the harvest," Montemayor said, who is also the board chairman of the Federation of Free Farmers.

He also suggested that the government take the necessary steps to ease the impact on the country of the drought in China.

"The issue on Mekong River has been developing for many years now and there is the drought in China, all the more we should now be moving fast to introduce the necessary changes in our agriculture so that we will have the capacity to provide for our food requirement," Montemayor said.

He suggested that the government address the issues on fertilizer subsidy, irrigation systems and the agricultural credit system.

"If a farmer has no access to credit, how can he purchase the inputs that he needs? So it's the whole value chain that we need to review to make sure the necessary changes are put in place. The effects of climate change are worsening, and you will never know if another Ukraine crisis will happen," Montemayor added.