NFA not yet ready to let go of functions

The National Food Authority (NFA) is not yet ready to let go of its functions despite the lifting of the quantitative restrictions on rice. If anything, NFA wanted to be left alone.

In a statement on Thursday, NFA said it will continue to build up its food security buffer stocks from domestic palay procurement and rice importation, if necessary, even under a regime where there's no QR.

The agency made its position clear against speculations that with the lifting of QR in favor of higher tariffs on rice imports, NFA may have to be reorganized to limit its functions to proprietary activities such as buffer stocking and local procurement.

QR is the limit to the volume of goods traded by a country. World Trade Organization's (WTO) QR on rice, which has lapsed in June, protected local farmers from foreign rice imports by imposing a high 35 percent tariff rate on them after hitting certain shipment limit.

The Philippines QR for rice imports that was granted by the WTO expired on June 30 this year.

Moving forward, the NFA management said it believes that it will take a while before the domestic rice market would be able to adjust to the non-QR regime, but the government should continue to provide safety nets for the farmers who will be most affected by the freer entry of imported rice into the country.

“We cannot speculate on how much lower rice prices could go under a nonQR but higher tariff situation. Our role in NFA is to ensure that there will always be enough affordable rice for everyone, including the small farmer-producers who are also end-consumers of their own produce,” NFA administrator Jason Aquino said.

While performing buffer stock functions, Aquino said the NFA shall continue to issue import licenses and provide the necessary guidelines to ensure food safety and quality standards.

To compensate for the expiration of QR, the Philippine government unilaterally extended the Minimum Access Volume (MAV) commitments of 805,200 metric tons (MT) and corresponding tariff concessions to maintain special treatment through Executive Order No. 23 (EO 23).

The MAV and tariff concessions will remain in place until December 31, 2020 or until an amendment to the Agricultural Tariffication Act (which exempts rice from tariffication) is passed, US Department of Agriculture mentioned on its latest Global Agricultural Information Network (GAIN) report.

The legislative amendment, which requires moving into tariff-based system and ending the QR, has not been passed. A bill to this effect is being developed by Congress, the timeline of which is unknown, GAIN further said.

Although delayed, imports under the rice MAV are expected to come in through the latter part of this year and early 2018.

In the GAIN report, USDA estimated rice production in the country during the market year 2017 to 2018 to rise from 770,000 tons to 11.97 million tons as area harvested increased consistent with Philippine Statistics Authority (PSA) data.

"Increased output is expected as a result of favorable weather conditions and increased use of high-yielding varieties. There were noticeably fewer intense typhoons that passed through major rice production areas compared to previous years," GAIN said.

It also said that a substantial shift away from rice to corn is not expected due to delays in the tariffication of rice, which requires a legislative amendment to the Agriculture Tariffication Act.

Imports were also pared down 400,000 tons to 1.3 million tons in Market Year 17/18 as a result, and ending stocks were raised.