₽10-B add’l fund to hike palay buying price mulled

A measure seeking to inject a supplemental fund of 110 billion to force the National Food Authority (NFA) to buy palay at a farmgate price of 122 per kilogram (/kg) from the 117 per kg price for more than nine years now is set to be filed at the House of Representatives today.

This will be the first time ever for the Lower House to intervene in the worsening rice price situation in the Philippines, the world’s largest importer of this staple commodity.

In an interview, Anakpawis Partylist Representatives Ariel Casilao said he will file the measure today, Monday.

This measure was resorted to after the NFA Council, the highest policymaking body of the grains agency, rejected for the nth time to hike the agency’s buying price for palay, which has been pegged at 117/kg for more than nine years already.

The Council claimed, or feared, that doing so would further cause pressure to inflation. Instead, it approved the importation of an additional 250,000 metric tons (MT) through an open tender scheme.

“Hiking the buying price of palay is inflationary? Nobody believes it anymore. When TRAIN 1 [Tax Reform for Acceleration and Inclusion] was deliberated in the Congress, we issued a caution that once this is passed, this will impact greatly on inflation. We are not magicians to predict. We based our fear on concrete conditions on the ground. Now they are using inflation to scare to make any move but they are just bent on continuing the policy on importation,” said Casilao.

This amount of money could buy 700,000 metric tons (MT) of palay. Ideally, it will be used before the year ends or at the time when farmers are harvesting their second crop for the year.

Congress, according to Casilao, can overrule any position of the NFA Council.

“If the Council did not act on the proposal of the farmers representatives to increase the buying price from 117 to 122, then, within the legislative function of the Congress, we can enact a resolution, a law, that NFA, being an executive branch, should follow,” Casilao explained.

“The timing of this proposal falls within the second cropping season, you expect supply to be available. The question here is whether who will get the supply first, the trader or the government?” he added.

NFA has long been complaining about the low buying price of palay, using it as a primary excuse to resort to importation every time its buffer stocks would go down.

Failing to procure palay, the agency completely ran out of stocks at the earlier part of this year, the first time it happened in years.

This prompted President Rodrigo Duterte to step in and order a series of rice importation, which was later on plagued with

so many issues such as weevil infestation and its failure to temper, even for once, the increase in the price of rice.

As this happens, NFA Administrator Jason Aquino was also accused for using the agency’s palay procurement budget worth ₽5.1 billion to pay NFA's debt in 2017.

“They [NFA Council] can always challenge our proposal. But part of the legislative power of Congress is to enact laws,” Casilao said.

He also pointed out that it is “not explicitly written” in the charter of NFA that the buying price of palay should stay within ₽17/kg.

“The buying price is a recommendation from the NFA Council but anytime of the day, the President can always increase it. In 2008, during the time of former President Gloria Macapagal Arroyo, the farmgate price of palay was increased to ₽17/kg through an Executive Order. It was not necessarily a decision of the Council,” Casilao further said.