Let traders import rice — FEF

THE Foundation for Economic Freedom (FEF) said the government needs to loosen its control over the rice trade by allowing private traders to import rice, and not just the National Food Authority (NFA).

In a statement released over the weekend, FEF, an association of prominent economists and former technocrats, said that NFA’s failure to inject rice into the market to stabilize prices gives private traders ample opportunity to exploit the situation.

FEF said imports by private traders will still be affordable to the poor, noting that then NFA is mandated to sell rice at a range of P27 to P32 per kilo while private traders would sell at a range of P36 to P41.

“If private traders can freely import rice, they can quickly respond more to the needs of the rice market. The price of rice in our rice-exporting neighbors is about half the domestic price of rice,” it read.

“There is no reason why rice prices should become unstable and rise since there is plentiful supply from our neighboring countries that can be easily tapped by our private traders.”

The NFA last month said that its rice inventories are running low, leaving it unable to inject supply into the market in respons to a crisis.

“The low level of NFA stocks makes the rice market vulnerable to price manipulation by rice traders. This happens if there is a monopoly on rice imports,” FEF said.

In May 2017, NFA Council Chairman Leoncio B. Evasco, Jr. said that the council will allow private rice traders to import during lean months to avoid shortages.

The NFA is mandated to maintain rice stocks good for 30 days between July and September, and 15 days at any given time.

Last year, the NFA had to allocate rice to Marawi after the five-month siege. In January, the NFA also directed more rice to Albay after the eruption of Mayon volcano.

However, FEF said that NFA did not request to replenish its stock within weeks of releasing inventory.

“[ W] ithout adequate stocks, NFA cannot effectively bring down the price. Accordingly, the poor will have to pay more for the rice.”

While FEF said that the Philippines entered the year with a low stock ratio, NFA Administrator Jason Laureano Y. Aquino said in earlier reports that commercial firms and households still maintain abundant stocks. —