Rice policy needs to be straightened out

AST week’s reported buffer stock shortage of state- subsidized ( cheaper) rice gives renewed urgency for the government to overhaul the decades- old policy on the national staple.

However, the National Food Authority ( NFA) spins its story, the bottom line being that a shortage in subsidized rice in the market has led to higher prices.

As a result, the interagency NFA Council authorized the importation of 250,000 metric tons of rice by June, after the rice harvest.

One wonders whether the NFA is really doing

- ernment, more or less, is supposed to know how much the deficit will be and plans the volume and timing of imports accordingly. But incompetence at the agency has resulted in rice shortages, benefiting only the rice traders. It’s the exact opposite of the mandate of the state grains agency to support Filipino farmers and keep rice prices affordable to consumers.

To be fair to the NFA management, its mandate defies the laws of economics. To fulfil its mandate, the NFA is supposed to buy palay at prices high enough to support local farmers. It is then supposed to sell rice at a price low enough for consumers to afford the staple.

However, what happens is that farmers end up selling to traders who have the resources to offer all sorts of inducements, instead of the government.

The NFA, thus, becomes merely an importer of rice, albeit a monopoly and one of the world’s biggest buyers. It’s a lucrative endeavor, especially when permits are auctioned off to the private sector, or when the government taps a logistics provider to handle the rice shipments.

Unknown to the ordinary consumer, the “NFA rice” sold at the markets is actually imported rice, not the produce of local farmers.

It’s time we ended this mess of a policy that has only benefited a few. Congress should finally amend the Agricultural Tariffication Act and abolish the rice quota, and impose a uniform tariff on rice imports, instead, as recommended by many economists.

The Bangko Sentral ng Pilipinas said passing such a bill would help mitigate the inflationary effects of the tax reform law. The Department of Finance, in fact, expects rice prices to drop by P7.00 per kilo with the passage of the bill.

The Executive department should also take another look at the oversight structure of the NFA.

It’s puzzling why the Department of Agriculture has no say on the NFA’s affairs, a holdover from the Aquino administration, which saw it fit to split the agriculture bureaucracy into different fiefdoms for political considerations, rather than appoint competent people and effect meaningful reforms.

At the very least, the secretary of agriculture should be a member of the NFA Council, to allow policy coordination.

There is a lot of straightening out needed to reform rice policy. The status quo has not worked, and will never work.