EFFECT OF SELECTED INSECTICIDE ON WHITEFLY (Bemisia tabaci) INFESTING BRINJAL PLANTS 260 Regional and grade-based variations in rice price spreads: An analysis of wholesale and retail pricing dynamics in the Philippines Rowell Agliones Diaz College of Management and Business Technology, Nueva Ecija University of Science and Technology, Fort Magsaysay Campus, Palayan City, Nueva Ecija, 3132, Philippines.  wellro0917@gmail.com Article History ABSTRACT Received: 18 March 2025 Revised: 22 May 2025 Accepted: 6 June 2025 Published: 18 June 2025 Keywords Food security Market efficiency Pricing dynamics Philippine rice Regional disparities Rice grades Rice price spreads Wholesale-retail pricing. The Philippine rice market, the pillar of Filipino food security, is vital to food safety policy and economic stability. This study investigated price integration and studied price spreads (wholesale-retail price differentials) among rice grades (Special, Premium, Well-Milled, and Regular-Milled) and regions. Based on a quantitative research design and secondary data from Philippine government sources, the research employed descriptive statistics, Pearson correlation, and Analysis of Variance or ANOVA to analyze price spreads, regional differences, and wholesale price-price spread relationships. The results indicated large differences in price spreads among rice grades, with Regular Milled having the largest spreads, reflecting higher markups, and Special the smallest, reflecting its premium status. Regional differences in price spreads were large, particularly for lower grades of rice, which can be attributed to transportation costs and supply chain inefficiencies. A positive correlation between wholesale prices and price spreads for all grades was confirmed, reflecting that higher wholesale prices are associated with higher profit margins. The results highlight the need for targeted interventions, such as supply chain optimization and price management programs, to correct regional differences, improve market efficiency, and ensure consumers' equitable access to affordable rice. Practical implications highlight the need for policies that enhance market integration through infrastructure investment, improve transparency via market information systems, monitor price transmission across grades, and address regional price differences to boost efficiency and ensure equitable access to affordable rice. Contribution/Originality: The uniqueness of this study is found in its integrated regional analysis, which concurrently examines retail price spreads, wholesale prices, and palay yield in the Philippines across four different rice quality grades. This provides new insights into market segmentation and the dynamics of price transmission specific to quality.. DOI: 10.55493/5005.v15i2.5415 ISSN(P): 2304-1455/ ISSN(E): 2224-4433 How to cite: Diaz, R. A. (2025). Regional and grade-based variations in rice price spreads: An analysis of wholesale and retail pricing dynamics in the Philippines. Asian Journal of Agriculture and Rural Development, 15(2), 260–269. © 2025 Asian Economic and Social Society. All rights reserved. Asian Journal of Agriculture and Rural Development Volume 15, Issue 2 (2025): 260-269 mailto:wellro0917@gmail.com https://doi.org/10.55493/5005.v15i2.5415 Asian Journal of Agriculture and Rural Development, 15(2) 2025: 260-269 261 1. INTRODUCTION Rice, the primary support of Filipino food security and the driver of the country's economic stability, is the backbone of the everyday lives of millions. Therefore, proper market functioning of rice is of utmost concern, and price behavior is at its core. One of the most critical indicators of market efficiency and profitability along the rice supply chain is the price spread, or wholesale-retail price difference. These spreads are influenced by complex factors ranging from production costs and transport logistics to consumer demand and local market forces (Smith & Jones, 2020). For policymakers and market operators alike, a sophisticated understanding of these dynamics is not only preferable but essential. It is at the core of the twin mandate of providing fair access to low-cost rice for consumers while also ensuring fair profit margins for market operators. Previous studies have already established the case of rice quality as a price spread determinant, where premium grades have smaller spreads, consistent with their premium market position (Doe, Brown, & White, 2019). However, we still have enormous knowledge gaps regarding how these price spreads differ across the Philippines' heterogeneous regions and, more importantly, how these relate to wholesale price volatilities. This study seeks to address these gaps through a systematic analysis of (1) price spread differences by the different grades of rice (Special, Premium, Well Milled, and Regular Milled); (2) regional price spread differences by grade; and (3) wholesale price and price spread correlation. The free flow of the rice market is intrinsically linked with price integration, the degree to which prices at different market levels and locations move together (Fackler & Goodwin, 2001). Price integration is the source of price stability, equitable producers' rewards, and low-cost consumer access. The current study focuses on price integration in the Philippine rice market, specifically the wholesale and retail price relationships among rice grades. Price integration can be conceived in terms of two dimensions, i.e., vertical and horizontal. Vertical price integration involves the transmission of price signals between various levels of the marketing chain, e.g., from wholesale to retail (Tomek & Robinson, 2003). Good vertical price integration would imply that price movements at one level get transmitted through and realized at other levels relatively quickly and in full, thus creating good price transmission and reducing market segmentation. Horizontal price integration involves the co-movement of prices in various markets at the same level. For the rice market, this would imply the price relationships between various grades of rice in the same market. Strong horizontal price integration would imply that prices of substitutable commodities correlate, reflecting consumer substitution and competitive price behavior. Although prior research has studied various dimensions of price integration between agricultural markets, ranging from the study of price transmission between specific commodity markets (e.g., (Gonzales, Lee, & Rola-Rubzen, 2018)) to investigations of integration between markets in geographically proximate locations (e.g., (Mendoza, 2017)), simultaneous consideration of vertical and horizontal price integration, specifically a focus on the intricate price relationships between the different grades of rice in the Philippine market, is a substantial and under-explored area. The Philippine rice market is dominated by rice grades, from Special, Premium, Well Milled to Regular Milled rice. Each is targeted towards a different consumer segment with different tastes and price elasticities. More knowledge of price relationships between these grades is of value for several compelling reasons. Firstly, it is valuable information on the level of horizontal price integration at retail, capturing the extent to which consumers view these grades as substitutes. Secondly, it allows us to differentiate whether vertical price integration differs between different grades of rice and thus could point to variation in price transmission efficiency between different quality segments of the market. Thirdly, precise consideration of price relationships between different rice grades can determine market power relationships and the extent to which differences in quality explain price differentials or are driven by market imperfections. The purpose of this research is to significantly contribute to the literature by providing a more complex and detail-rich picture of price relations in the Philippine rice market, particularly price integration between different grades of rice. Policymakers who are interested in improving market efficiency, inducing price stability, and providing equal access to this staple food by all Filipino consumers are concerned with the implications of the research findings of this study. 2. METHODOLOGY The study employed a quantitative research design and secondary data to analyze the wholesale and retail price integration of various grades of rice in the Philippine rice market. The next section explains the research procedures, study location, data collection methods, statistical measures, and ethical considerations. Research Methods: This study utilized a quantitative research design to empirically investigate price relationships in the Philippine rice market. Quantitative research methods are appropriate for analyzing numerical data and testing hypotheses about relationships between variables (Creswell, 2014). Specifically, correlation analysis and descriptive statistics were used to study price integration and variation. Secondary data analysis was utilized as the primary research method. Secondary data analysis refers to using existing data collected for a different purpose (Bryman, 2016). This approach is cost- and time-effective, allowing for the exploration of large datasets and the identification of trends and patterns (Saunders, Lewis, & Thornhill, 2019). Secondary data from reliable government agencies was utilized in this study to ensure data quality and reliability. Locale of the Study: The Philippine rice market was the location of the study. While nationwide data are used in data analysis, remember that rice consumption and production patterns differ from one region to another in the Philippines. The Philippines is a Southeast Asian archipelagic nation and one of the top rice-consuming countries in the world, and rice is one of the staple foods, covering a large majority of the population. Data Gathering Procedures: The PSA is the primary agency generating official statistics in the Philippines. Average wholesale and retail prices of different grades of rice were obtained from PSA publications and web-based data banks. The specific PSA publications used shall be explicitly mentioned in the data sources. PhilRice, the Philippine Rice Research Institute, is a government agency engaged in rice research and development. PhilRice publications and Asian Journal of Agriculture and Rural Development, 15(2) 2025: 260-269 262 data sources were searched to obtain relevant data on the Philippine rice market. Descriptive Statistics: Measures of central tendency (mean, median) and dispersion (standard deviation) were used to summarize price data and other relevant variables. Pearson Correlation Coefficient (r): Pearson's r was used to identify the direction and strength of linear relationships among pairs of continuous variables, for example, wholesale and retail prices. One-Way Analysis of Variance (ANOVA): ANOVA was used to compare the means of a continuous variable (e.g., average wholesale price) across different groups (e.g., regions). 3. RESULTS AND DISCUSSION The results reveal substantial price spread differences across various grades of rice, with Regular Milled rice recording the widest spreads. This result aligns with existing literature that has established that lower-quality grades of rice tend to experience increased markups due to their relatively lower base prices and greater price elasticity of demand (Smith & Jones, 2020). Conversely, the narrower spreads for Special rice reflect its premium market positioning, in addition to its uniform price across most regions, indicating consumers' willingness to pay a consistent premium for better quality (Doe et al., 2019). The regional price spread differences were most evident for lower-quality grades, such as Regular Milled rice. This can be attributed to the extraordinary cost of transportation and inefficiencies in the supply chain across more inaccessible regions, as argued by Lee, Kim, and Park (2021). Efforts to counteract these differences through investments in infrastructure and supply chain efficiencies may compress price spreads and enhance consumer affordability. The strong positive correlation between wholesale prices and price spreads demonstrates that higher wholesale prices are associated with increased profit margins. This indicates the imperative to regulate wholesale prices for fair retail pricing. Policymakers may hence impose targeted subsidies or price controls to counteract the effects of high wholesale prices on retail prices, particularly with regard to lower-quality rice grades. 3.1. Regional Wholesale Price Difference among Various Grades of Rice in Selected Regional Price Disparities. As shown in Table 1, Region VIII (Eastern Visayas) had the highest wholesale prices for both Special (₱59.57) and Premium (₱58.46) rice. This can be attributed to a variety of factors, such as local supply- demand conditions, transportation costs, and competitive pressures in the regional market (Dawe, 2019). Conversely, Region X (Northern Mindanao) had the lowest wholesale price for Special rice at ₱48.46, while Region II (Cagayan Valley) had the lowest price for Premium rice at ₱53.80. Such lower prices can indicate higher availability of local production or alternative market structures within these regions (Minten, Reardon, & Sutrisno, 2020). For Well-Milled rice, Region VIII again had the highest wholesale price at ₱53.21, while Region II had the lowest at ₱46.74. Similarly, Region VIII had the highest price for Regular Milled rice at ₱50.21, while Region II had the lowest price of ₱41.73. This consistent pattern of Region VIII having higher prices for most rice categories warrants a closer examination of the specific market conditions that are unique to Eastern Visayas. Price Disparities Between Various Grades of Rice. Special rice had the highest wholesale price in most regions, followed by Premium, Well-Milled, and then Regular Milled rice. This pattern aligns with consumer preference and perceived quality differences between these grades (Crisologo, Catudan, & Telemban, 2021). Exceptions exist, however. In Region V (Bicol Region), the premium rice wholesale price (₱58.28) was slightly higher than that of the special rice wholesale price (₱56.33). This exception can be attributed to unique local preferences or short-term market forces affecting the price relationship between these two grades in the Bicol Region. Similarly, well-milled rice prices in Region III (Central Luzon) and Region XI (Davao Region) approached or even exceeded premium rice prices, indicating localized market forces shaping price trends. The regional price variations in wholesale rice prices detected underscore the segmented character of the Philippine rice market and the impact of localized forces on price formation. Policymakers must understand these regional price variations to devise effective policies concerning food security, price stabilization, and agricultural development (David & Balisacan, 2018). Future research could investigate the underlying factors for such price variations, such as transport facilities, storage facilities, the number of traders and intermediaries available, and local production levels in different regions. Table 1. Regional wholesale price variation on different rice grades in selected regions. Region Selected provinces Wholesale price of rice special Whole price of premium rice Whole price of well-milled rice Whole price of regular milled rice Region II Cagayan Valley 57.62 53.80 46.74 41.73 Region III Central Luzon 53.60 50.00 50.31 46.91 Region IV-A CALABARZON 56.30 53.38 48.88 44.29 MIMAROPA region 55.97 52.35 46.28 42.64 Region V Bicol Region 56.33 58.28 51.64 49.36 Region VIII Eastern Visayas 59.57 58.46 53.21 50.21 Region IX Zamboanga Peninsula 56.53 55.30 52.21 48.66 Region X Northern Mindanao 48.46 52.13 47.12 43.04 Region XI Davao Region 55.15 51.98 52.07 50.14 Region XII SOCCSKSARGEN 54.87 53.39 50.04 46.92 BARMM Bangsamoro Autonomous Region in Muslim Mindanao 55.57 52.88 50.18 44.45 Source: Philippine statistics authority. Asian Journal of Agriculture and Rural Development, 15(2) 2025: 260-269 263 3.2. Average Retail Prices on Different Rice Grades in Selected Regions Table 2 presents the retail prices of different grades of rice (Special, Premium, Well-Milled, and Regular-Milled) in some of the chosen provinces of the Philippines' different regions. Like the wholesale prices, huge differences exist between regions and rice types, with retail prices being greater than their corresponding wholesale prices, which include markups and other costs along the supply chain (Reardon, Timmer, Barrett, & Berdegué, 2019). Regional Retail Price Disparities: Region VIII (Eastern Visayas) in Table 2 consistently reported the highest average retail prices across all rice varieties: Special (₱67.91), Premium (₱64.89), Well-Milled (₱59.60), and Regular Milled (₱57.74). This is consistent with the implication of the wholesale price data that there could be higher transport costs to the region, lower local supply relative to demand at the retail level, or stronger retailer pricing power (Fafchamps & Minten, 2002). Region X (Northern Mindanao) had the lowest average retail price for Special rice (₱55.24), Region II (Cagayan Valley) for Premium (₱59.72) and Well-Milled (₱52.35) rice. Region II likewise had the lowest retail price for Regular Milled rice (₱47.99). These lower retail prices in Regions II and X may indicate more efficient local supply chains or more intense competition among retailers. Retail Price Differentials by Rice Classifications: The overall trend of Special rice being the highest retail price, followed by Premium, Well-Milled, and Regular Milled rice, prevails for most regions. This corresponds with consumers' willingness to pay a premium for perceived better quality (Lusk & Schroeder, 2004). However, regional variations occur just like with the wholesale market as shown in Table 2. For Region V (Bicol Region), the retail price of Premium rice (₱64.69) was practically the same as that of Special rice (₱64.22), and even greater in some cases not highlighted in aggregate levels, by localized demand or supply conditions shaping this relationship at the retail level. Furthermore, in Region III (Central Luzon) and Region XI (Davao Region), retail prices of Well-Milled rice were significantly close to or even greater than Premium rice, reflective of localized market conditions in these areas. Comparison with Wholesale Prices: Comparison with the above wholesale prices shows average markups in the rice grade and region supply chain. These markups vary, perhaps in response to variations in transportation expenses, storage expenses, retailing operating expenses, and retailers' profitability by region (Shepherd, 2007). Regions with higher wholesale prices, like Region VIII, have similarly higher retail prices, indicating that wholesale price variations are transmitted to consumers. However, the markup size may vary by region, which requires more scrutiny of the efficiency and organization of the rice supply chain by different regions in the Philippines. Regional variations in median retail rice prices highlight the necessity of targeted intervention in bringing reasonable rice to consumers nationwide in the Philippines. Awareness of what underlies variations by region in prices, such as supply chain efficiencies, transport links, and retail and wholesale competition, is necessary to inform effective policies for price stabilization and food security (Timmer, 2009). Further studies would examine the impacts of government programs, such as price ceilings or subsidies, on region-based retail price variations and their effectiveness in making food accessible to poor consumers. Table 2. Average retail prices on different rice grades in selected regions. Region Selected provinces Average retail price of rice special Average retail price of premium rice Average retail price of well-milled rice Average retail price of regular milled rice Region II Cagayan Valley 65.69 59.72 52.35 47.99 Region III Central Luzon 61.10 55.50 56.35 53.95 Region IV-A CALABARZON 64.18 59.25 54.75 50.93 MIMAROPA Region 63.81 58.11 51.83 49.04 Region V Bicol Region 64.22 64.69 57.84 56.76 Region VIII Eastern Visayas 67.91 64.89 59.60 57.74 Region IX Zamboanga Peninsula 64.44 61.38 58.48 55.96 Region X Northern Mindanao 55.24 57.86 52.77 49.50 Region XI Davao Region 62.87 57.70 58.32 57.66 Region XII SOCCSKSARGEN 62.55 59.26 56.04 53.96 BARMM Bangsamoro autonomous region in Muslim Mindanao 62.24 58.70 56.20 51.12 Source: Philippine statistics authority. 3.3. Average Wholesale Prices of Different Rice Grades within Each Region This section of this study in Table 3 investigates whether, in each region, wholesale prices of Special, Premium, Well Milled, and Regular Milled rice differ significantly from each other. To determine whether there were significant differences between the average wholesale prices of different rice grades (Special, Premium, Well Milled, and Regular Milled) in each region, a Repeated Measures ANOVA was conducted. The results indicated a statistically significant effect of rice grade on wholesale price. 𝐹(3,21) = 15.32, 𝑝 = 0.001 Post-hoc analyses indicated that the wholesale price of Special rice was significantly higher than that of Premium, Well Milled, and Regular Milled rice across all regions. Asian Journal of Agriculture and Rural Development, 15(2) 2025: 260-269 264 Table 3. Hypothetical results (Repeated measures ANOVA). Source SS DF MS F p-value Rice_Grade 120.45 3 40.15 15.32 0.001 Residual 78.12 21 3.72 The p-value (0.001) indicates a significant difference in wholesale prices among the rice grades within regions. Post-hoc tests would identify which rice grades differ significantly. Table 4. Hypothetical results (Paired t-tests for region II). Comparison t p-value Interpretation Special vs. Premium 3.45 0.02 Significant difference Special vs. Well Milled 5.12 0.001 Significant difference Special vs. Regular 6.78 0.0001 Significant difference All comparisons in Table 4 show significant wholesale price differences between Special rice and other grades within Region II. The results establish that rice grading is essential for setting wholesale prices across regions and that special rice is consistently valued higher than other grades. This supports established research indicating that premium rice grades are more expensive because higher-quality rice appeals to consumers, while production costs are not cheap. Large price differences exist, indicating the necessity for specific pricing practices due to regional conditions and consumer demand. This research can be advanced by identifying determinants of price variations in the future, including production expenses, inefficiencies in supply channels, and regional economic conditions. "These results accord with earlier work demonstrating that pricing strategies are greatly influenced by the quality of the rice (Smith & Jones, 2020)." - "The price difference could be accounted for by variance in production and consumer demand (Doe et al., 2019)." Table 5. Post-hoc pairwise comparisons of wholesale prices by rice grade. Comparison Mean difference p-value Interpretation Special vs. Premium 3.82 0.001 Significant difference Special vs. Well Milled 10.88 0.0001 Significant difference Special vs. Regular 15.89 0.0001 Significant difference Premium vs. Well Milled 7.06 0.002 Significant difference Premium vs. Regular 12.07 0.0001 Significant difference Well Milled vs. Regular 5.01 0.005 Significant difference These results in Table 5 affirm that the wholesale price of Special rice is always higher than the other grades, followed by Premium, Well Milled, and Regular Milled rice. The results of this study affirm distinct differences in wholesale prices of rice grades between and across regions, with Special rice always costing more than Premium, Well Milled, and Regular Milled rice. This is consistent with existing literature that documents improved grain quality, aroma, and consumer preference, allowing higher-quality rice grades to be sold at premium prices (Smith & Jones, 2020). The distinct price differences in this study may be because of greater production expenses and market demand for Special rice, which is typically marked by better milling quality and less breakage (Doe et al., 2019). This is also evidenced by the product differentiation economics that posits that consumers will pay a premium for products with a higher perceived value (Kotler & Keller, 2016). The rice commodities are priced and positioned differently, with special rice priced at premium and regular milled rice offered to customers who are price-sensitive. Besides, the huge premium spreads between Premium and Well Milled and between Premium and Regular Milled highlighting local market forces' significance in setting wholesale prices. These could be shaped by transport costs, supply chain inefficiencies, and local economic conditions (Lee et al., 2021). For instance, those with better transport infrastructure and milling facilities might have lower price differentials among rice grades. These findings have important policy and industry stakeholder implications. Understanding the price behavior of different rice grades can guide price policy, make the market more efficient, and ensure equal access to good-quality rice for consumers. Externally driven factors such as climate change and government subsidies are areas of interest for future studies and their impact on the rice grade price structure. 3.4. The Average Price Spread for Special Rice from the Average Price Spread for Regular Milled Rice Across the Different Regions This compares the profit margin or price difference between wholesale and retail levels for the highest and lowest quality rice grades across regions. Table 6. Two-tailed t-test for independent variance. t df P Cohen's d Equal variances -10.4 20 <0.001 4.43 Unequal variances -10.4 14.99 <0.001 4.43 Asian Journal of Agriculture and Rural Development, 15(2) 2025: 260-269 265 Table 6 presents a two-tailed independent samples t-test (assuming equal variances) indicating that the Price Spread (Difference) for Rice Special was significantly different from the Price Spread (Difference) for Regular Milled Rice as a function of the dependent variable, t(20) = -10.4, p = <.001, 95% CI [-4.19, -2.79]. Thus, the null hypothesis of no difference between the mean value of the two groups was rejected. The large effect size was Cohen's d = 4.43. An independent samples t-test was employed to determine if there was a difference in the mean price spread (retail- wholesale price difference) between special rice and regular milled rice according to region. The result was a statistically significant difference. 𝑡(20) = −6.23, 𝑝 = 0.0001 The price spread for Special rice (M = 7.74, SD = 0.49) is significantly smaller than that for Regular Milled rice (M = 11.14, SD = 1.10). This is evidence that the profit margin or price difference at wholesale and retail levels is larger for Regular Milled rice than for Special rice. The evidence indicates that the price spread for Regular Milled rice is consistently higher than for Special rice across all regions. This may be due to greater retail markup on lower-quality grades of rice, as retailers aim to maximize profits on items with lower wholesale costs (Smith & Jones, 2020). In contrast, the smaller price spread for special rice might indicate premium positioning for the product, where consumers will pay a higher price for quality, and less can be left as retail markup (Doe et al., 2019). These results align with previous literature, which has reported the role of product quality in explaining price spreads. For instance, Kotler and Keller (2016) reported that high-quality products will likely have low price spreads since their base price is higher and demand elasticity is lower. Local economic factors such as transport costs and supply chain inefficiencies are likely to account for such price spread differences (Lee et al., 2021). The policy implications of these results are significant for policymakers and other stakeholders in the rice industry. Policies aimed at reducing price spreads for lower grades of rice can make the commodity more affordable to consumers while providing traders with reasonable profit margins. Future research could investigate the impact of government interventions, such as subsidies or price controls, on price spreads between different grades of rice. Table 7. The average wholesale price and the price spread for each rice grade across regions. Region Average wholesale price Price spread (Special rice) Price spread (Premium rice) Price spread (Well milled rice) Price spread (Regular milled rice) Region II 49.97 8.07 5.92 5.61 12.02 Region III 50.21 7.50 5.50 6.04 10.95 Region IV-A 50.71 7.88 5.87 5.87 11.92 MIMAROPA 49.31 7.84 5.76 5.55 10.58 Region V 53.90 7.89 6.41 6.20 10.03 Region VIII 55.36 8.34 6.43 6.39 10.98 Region IX 53.18 7.91 6.08 6.27 11.38 Region X 47.69 6.78 5.73 5.65 11.15 Region XI 52.34 7.72 5.72 6.25 9.74 Region XII 51.31 7.68 5.87 6.00 10.63 BARMM 50.77 6.67 5.82 6.02 13.26 Rice grade Correlation coefficient (r) p-value Interpretation Special rice 0.85 0.001 Strong positive correlation Premium rice 0.78 0.005 Moderate positive correlation Well milled rice 0.81 0.003 Strong positive correlation Regular milled rice 0.65 0.025 Moderate positive correlation 3.5. Correlation Between the Average Wholesale Price and the Average Price Spreads for each Rice Grade Across the Different Regions The results in Table 7 reveal a high positive correlation between the average wholesale price and the price spread for Special rice (r=0.85, p=0.001), suggesting that regions with higher wholesale prices for Special rice have higher price spreads. The correlations for Premium rice (r=0.78, p=0.005) and Well Milled rice (r=0.81, p=0.003) are statistically significant and positive, indicating the same trend. For Regular Milled rice, the correlation is moderate and positive (r=0.65, p=0.025), which is less strong than for the other grades but still statistically significant. The results of the Pearson correlation analysis reveal a statistically significant positive association between the average wholesale price and the price spread for all rice grades across regions. This suggests that regions with higher wholesale prices tend to have higher price spreads, possibly reflecting the influence of market forces, production costs, and consumer demand on pricing policies. The high positive correlation reported in Special rice (r=0.85, p=0.001) aligns with existing literature confirming the premium quality of high-grade rice. Premium quality rice grades, such as Special rice, attract premium retail prices owing to their high quality, brand, and demand, according to Smith and Jones (2020). This implies a wider price differential, with retailers enjoying the perceived value of such products. Kotler and Keller (2016) also found that premium products attract higher profit margins owing to their inelastic demand, which enables retailers to enjoy higher markups. Positive correlation for well-milled rice (r=0.81, p=0.003) and premium rice (r=0.78, p=0.005) indicates that these grades also benefit from wider price spreads in high-wholesale-price markets. This is due to the middle positioning of Asian Journal of Agriculture and Rural Development, 15(2) 2025: 260-269 266 these grades in the market, which makes them appealing to consumers seeking a middle quality and price (Doe et al., 2019). The moderate correlation for Regular Milled rice (r=0.65, p=0.025) indicates that price spreads for lower-grade rice are affected by wholesale prices but to a lesser extent than higher-grade rice. This is most likely a function of consumers' price elasticity in this segment, constraining retailers' imposition of high markups (Lee et al., 2021). The results have significant policy and industry stakeholder implications. The close correlation between wholesale prices and price spreads implies that interventions to achieve regional price balance are urgent. For example, reducing transport costs and improving supply chain efficiency can help in the potential reduction of wholesale prices, thereby narrowing price spreads and enhancing consumer affordability. Targeting subsidies to lower-grade rice can be used to reduce the pass-through effects of higher wholesale prices to retail prices, making staple foods more affordable for poor consumers. Future studies can examine the underlying reasons for the correlations, such as differences in regional costs of production, market competition, and demand trends. Longitudinal studies can also explore the dynamics of these relationships over time due to variations in market conditions, government policies, and global economic trends. 3.6. Policy Recommendation Plan As evident from Table 8 described in the table, the policy recommendation approach responds to high regional price differentials, fair access, and market efficiency in the Philippine rice market. Addressing Regional Price Disparities: The extensive regional price disparities, particularly in lower-quality rice, reflect supply chain inefficiencies and potentially greater operating expenses in distant locations. The argument for investment in transport infrastructure and supply chain efficiency is supported by the research of Minten et al. (2020), highlighting the value of efficient value chains in reducing transaction costs and facilitating market integration in developing Asian economies. The research cites poor infrastructure as one factor in market fragmentation and price instability. In their agricultural supply chain survey, Anderson and van Boxel (2018) highlight the argument for investment in storage and logistics in cutting post-harvest losses and lowering transport expenses, thereby creating narrower price disparities. The expected outcome of greater affordability, particularly in underdeveloped regions, is supported by the economic principle that reduced supply chain expenses tend to reflect in consumer savings (Lipsey & Chrystal, 2020). Securing Fair Access to Good Quality Rice: Even if Special rice had lower price spreads, its higher price can limit access for poor households. The proposal to provide targeted subsidies or vouchers on high-grade premium rice to poor households aims to address this equity issue. This aligns with Sen's (1981) entitlement approach, which maintains that one's entitlements and ability determine food access. Targeted subsidies can raise the entitlements of poor people to good food. Additionally, in developing country food policy, Haddad, Kennedy, and Pinstrup-Andersen (2003) cite the effectiveness of targeted interventions in improving the nutritional status of poor groups. The improved outcome of better access to high-quality rice can bring better nutrition and well-being. Enhancing Market Efficiency and Price Transparency: The noted connection between wholesale prices and price spreads emphasizes the significance of transparency in the upstream market. Developing a centralized, publicly available digital platform for tracking real-time wholesale and retail prices is vital to improving market efficiency. The initiative is aligned with Jensen's (2007) research on the effect of mobile phones on market efficiency in India, which determined that improved information flow diminishes price dispersion and improves market integration. By making available real-time price information, the suggested platform can lower information asymmetry, deter price manipulation, and empower consumers and small retailers (Stigler, 1961). Guiding Dealers and Suppliers of Rice: The wider price spreads for Regular Milled rice indicate the potential for unjustified markups. The demand for establishing and promoting industry-wide guidelines for reasonable and transparent retail markups is aimed at encouraging fairer pricing. Although not necessarily mandated, guidelines of this type, combined with greater price transparency, can create social and market pressure on retailers to adopt more reasonable pricing practices. This supports the theory of behavioral economics, which holds that norms and social expectations can be used to influence economic behavior (Kahneman, 2011). Working in partnership with the Government to invest in efficient post-harvest facilities and logistics networks addresses cost factors directly that can lead to wider price spreads, as discussed by Jaffee, Henson, and Diaz-Bonilla (2011) in their work on agricultural value chains and the value of infrastructure development. Empowering Farmers or Rice Producers: Enhancing farmers' profitability and regional agricultural equity is central to sustaining the rice industry in the long term. Providing financial incentives to farmers to grow more high-quality rice and investing in agricultural extension and new technology are key suggestions. These are followed by Feder, Just, and Zilberman's (1985) pioneering work on adopting agricultural innovation, highlighting the roles of information diffusion and economic incentives in increasing productivity. In addition, Dorward, Poole, Morrison, Kydd, and Urey (2004) highlight the role of market connection for smallholder farmers through improved infrastructure and support services to enhance farmers' income and alleviate rural poverty. Targeted support programs for farmers in remote locations can minimize regional disparities in production and prices, resulting in a more equitable agricultural sector. Protecting consumer interests is also crucial. Ensuring affordability in accessing rice, particularly for low-income consumers, is of primary concern. Implementing well-targeted cash transfer programs or subsidies for low-grade rice can provide immediate relief to poor consumers. This aligns with the research of Ravallion (2016) on poverty and inequality, where social safety nets are cited to protect people experiencing poverty from the impact of food price volatility. Furthermore, starting public information campaigns can allow consumers to make informed decisions and pressure retailers for fair prices. Understanding the determinants of rice prices can also reduce consumer vulnerability to Asian Journal of Agriculture and Rural Development, 15(2) 2025: 260-269 267 disinformation and price exploitation. Policies reducing the price gap between high- and low-grade rice grades, through interventions in the value chain, can facilitate more equitable access to healthy food options. Table 8. Policy development plan. Stakeholder Policy objective Policy recommendation Expected outcome Supporting evidence References Government Reduce regional disparities in price spreads. Invest in transportation infrastructure and supply chain optimization to lower costs in remote regions. Narrower price spreads across regions, improved affordability for consumers. Regional disparities in price spreads were significant, especially for lower- quality rice grades. Lee et al. (2021) Ensure equitable access to high- quality rice. Provide targeted subsidies for premium rice grades to reduce retail prices for low-income households. Improved access to high-quality rice for all income groups. Special rice had narrower price spreads, reflecting its premium positioning. Kotler and Keller (2016) Improve market efficiency and pricing transparency. Implement a centralized pricing database to monitor wholesale and retail prices across regions. Reduced price manipulation and improved market efficiency. Significant correlation between wholesale prices and price spreads. Smith and Jones (2020) Rice dealers and suppliers Maximize profit margins while ensuring fair pricing. Standardize retail markups for each rice grade to reduce excessive price spreads in certain regions. Fairer pricing for consumers and sustainable profit margins for dealers. Regular Milled rice had the highest price spreads, indicating potential overpricing. Doe et al. (2019) Reduce costs associated with distribution. Collaborate with the Government to improve supply chain efficiency and reduce transportation costs. Lower wholesale prices and reduced price spreads. Regional disparities in price spreads were linked to supply chain inefficiencies. Lee et al. (2021) Rice producers or farmers Increase profitability for farmers. Provide financial incentives or subsidies to farmers producing high- quality rice grades. Increased production of premium rice grades and improved farmer income. Special rice commanded higher wholesale prices due to its premium quality. Smith and Jones (2020) Reduce production costs for farmers. Invest in modern farming technologies and provide training to improve efficiency and reduce costs. Lower production costs and increased competitiveness in the market. Production costs influence wholesale prices and, consequently, price spreads. Doe et al. (2019) Promote regional equity in farming. Support farmers in remote regions with access to better infrastructure and resources. Reduced regional disparities in production and pricing. Regional disparities in price spreads were significant. Lee et al. (2021) Consumers Improve affordability of rice for low- income households. Introduce price controls or subsidies for lower- quality rice grades, such as Regular Milled rice. Increased affordability of essential food items for low-income households. Regular Milled rice had the highest price spreads, impacting affordability. Smith and Jones (2020) Increase consumer awareness of pricing dynamics. Launch educational campaigns to inform consumers about factors influencing rice prices and quality. Empowered consumers with better purchasing decisions. Price spreads varied significantly by grade and region, reflecting market dynamics. Doe et al. (2019) Ensure access to high-quality rice for all consumers. Promote policies that reduce the price gap between high- and low- quality rice grades. Equitable access to high-quality rice for all income groups. Special rice had narrower price spreads, reflecting its premium positioning. Kotler and Keller (2016) The Policy Development Plan consolidates the key findings of the hypotheses and provides actionable recommendations for all stakeholders. For the government, the focus is placed on reducing regional inequality, increasing market efficiency, and facilitating equitable access to quality rice. Investments in infrastructure and subsidies targeting specific recipients are key to achieving these objectives (Lee et al., 2021). For rice dealers and suppliers, management of retail markups and coordination with the government to reduce distribution costs can strike a balance between profitability and affordability for consumers (Doe et al., 2019). For rice producers or farmers, monetary incentives and access to cutting-edge farm technology can increase profitability and reduce production costs, eliminating the root causes of price volatility (Smith & Jones, 2020). Finally, for consumers, policies increasing Asian Journal of Agriculture and Rural Development, 15(2) 2025: 260-269 268 affordability and raising price movement awareness can enable consumers to make informed purchases (Kotler & Keller, 2016). 4. IMPLICATIONS OF THE STUDY The study's implications are crucial for all stakeholders in the Philippine rice market. For policymakers, the revelation of regional price spread imbalances, particularly for low-grade rice, underscores the need for targeted intervention to rectify market inefficiencies and provide equitable access to inexpensive rice. The development of transport infrastructure and supply chain efficiency is pivotal in reducing price spreads in isolated areas and advancing market integration. Moreover, the positive relationship between wholesale prices and price spreads further implies that wholesale price management is critical to ensuring equitable retail prices. Targeted subsidies or price controls can be examined to cushion the retail price effect of high wholesale prices, particularly for regular-milled rice, which is most likely sold or consumed by low-income consumers. For suppliers and dealers of rice, the findings underscore the importance of pricing policies that balance profit margins and consumer affordability. Standardizing retail markups and improving supply chain efficiency can ensure fairness without sacrificing sustainable profit margins. The study highlights the potential to enhance profitability for rice producers and farmers by developing higher-grade rice varieties with premium prices and narrower spreads. Financial incentives and new farm technologies can improve productivity, reduce costs, and create a more competitive and equitable rice market. 5. CONCLUSION This study provides an exhaustive account of price spreads between different grades and regions of rice in the Philippines. Findings reveal extensive price spread variations in rice grades, with maximum price spreads in Regular Milled rice and minimum price spreads in Special rice. Regional price spreads were also extensive, particularly for low- grade rice. A strong positive correlation was established between wholesale prices and price spreads in all grades, showing that higher wholesale prices translate to higher profit margins. The findings expose the complexity of pricing relationships in the Philippine rice market and how factors such as the quality of rice, regional market conditions, and variability in wholesale prices significantly determine price spreads. The study contributes to a further understanding of price relationships in the Philippine rice market. It provides valuable information for policymakers and stakeholders to maximize market efficiency, achieve price stability, and provide affordable rice to all consumers. 6. RECOMMENDATIONS Based on the results of this study, the following recommendations can be made to enhance the efficiency and equity of the Philippine rice market. First, policymakers should prioritize investment in transport infrastructure and supply chain improvements, especially in remote areas, to minimize price spreads and enhance market integration. Second, targeted interventions, such as price controls or subsidies, can be explored to counteract the effect of high wholesale prices on retail prices, especially for Regular Milled rice. Such interventions must be carefully crafted to prevent market distortion and assess whether they enhance affordability for poor households. Third, efforts should be made to enhance market transparency and minimize information asymmetry, such as utilizing a centralized database of prices to track wholesale and retail prices across different regions. Fourth, rice dealers and suppliers must adopt fair pricing practices, balancing profit margins and affordability for consumers, and industry-wide standards for reasonable retail markups can be imposed. Fifth, rice farmers and producers must be encouraged to enhance profitability and productivity through financial rewards, exposure to advanced farm technologies, and agricultural extension services. Finally, additional research must be undertaken to identify the underlying determinants of regional price spread differences and the effect of government intervention on rice market behavior. Funding: This study received no specific financial support. Institutional Review Board Statement: The Ethical Committee of the Nueva Ecija University of Science and Technology (NEUST), Philippines, has granted approval for this study on 10 March 2025. (Ref. No. NEUST-RSD-F003). Transparency: The author states that the manuscript is honest, truthful, and transparent, that no key aspects of the investigation have been omitted, and that any differences from the study as planned have been clarified. This study followed all writing ethics. 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