‘NFA to sell rice at low price even after removal of QR’

R ice from the National Food Authority (NFA) will remain available to the public and will be cheaper than the commercial varieties even after a measure that will remove import caps is signed into law by President Duterte.

Quoting Sen. Cynthia A. Villar, Agriculture Secretary Emmanuel F. Piñol said government-subsidized rice will still be available to the public even after the President signs a law that will lift the quantitative restriction (QR) on imports.

Piñol said, however, that selling government-subsidized rice at P27 per kilogram (kg) may no longer be viable, as this could cause the NFA to incur more financial losses.

“Unless [the] government subsidizes NFA rice, it cannot be sold at P27 per kg because it would mean a loss of P9 per kg for the grains agency,” he said in a Facebook post. He said the provision disallowing the NFA to import rice for its buffer stock and local markets was supported by the Department of Agriculture and stakeholders in the rice sector. Presidential Spokesman and Chief Presidential Legal Counsel Salvador S. Panelo said on Wednesday that the proposed Rice Tariffication Act will be signed into law by Duterte “anytime soon.”

‘Unclear’

THE NFA on Wednesday said in a statement that it is looking into its future role with the impending enactment of the proposed Rice Tariffication Act.

Under Senate Bill (SB) 1998, or “An Act Liberalizing the Importation, Exportation and Trading of Rice, Lifting for the Purpose the Quantitative Import Restriction on Rice and for Other Purposes,” rider provisions were inserted that clipped most of the powers and functions of the NFA in implementing its food security and stabilization role.

The NFA was left with the mere function of buffer stocking for a specific purpose: to sustain the disasterrelief programs of the government during natural or man-made calamities.

Under Section 3, buffer stock is defined as “the optimal level of rice inventory that shall be maintained at any given time to be used for emergency situations and to sustain the disaster relief programs of the government during natural or man-made calamities.” It technically removed the function of rice buffer stocking for the purpose of stabilizing consumer prices.

Other NFA powers and functions repealed under SB 1998 are: The registration, licensing and supervision of persons and entities engaged in the grains business; the regulation of grains importation and exportation; monitoring and enforcement of grains trading rules and regulations; and the power to contract indebtedness and import rice for food security buffer stocking, among others.

“What will happen during the lean months, a period of no harvest, when rice prices traditionally increase? Will it not be treated as an emergency situation requiring government intervention? How do we ensure that those who cannot afford to buy high-priced commercial rice will still have rice on their table?” NFA OIC Administrator Tomas R. Escarez said.

In its 46 years of existence, the NFA said it has been supplying 60 to 80 percent of the rice needs of remote barangays and island provinces. These are the places where selling low-priced rice will not be attractive for profitoriented businessmen, as add-on costs would not make a feasible business proposition.

The NFA noted that at least 10 million Filipinos, or about 10 percent of the current population of 106 million rely on low-priced government rice for their daily sustenance.

“If NFA’s palay procurement would be limited for what is the ‘optimal volume’ needed for calamities and manmade emergencies, NFA may no longer be able to influence palay farm-gate prices. The country’s rice requirement for calamities averages at only about 500,000 metric tons annually, or only about 4 percent of the average 12 million MT annual rice production of the country,” Escarez said.

With unhampered rice importation, the NFA said more traders will also resort to buying rice than palay that will entail more expenses for processing, storage, handling, trucking and distribution to retailers.

“Even small rice traders will also be affected under the rice tariffication law, as rice retailing and wholesaling will be completely placed in the hands of the private sector. There are presently 74,875 NFA-licensed grains businessmen nationwide. More than 50,000 of them are into grains retailing,” Escarez said.

“The NFA’s 15,892 accredited retailers that sell NFA rice at P27 and P32/ kg will eventually lose their livelihood and consumers will no longer have access to rice at these prices,” he added.

Although the NFA is still awaiting the final approval of the bill and the ensuing implementing rules and regulations of the prospective law, Escarez said the agency is already studying and preparing recommendations on how to ensure rice price and supply stabilization.

Economic managers have been pusing for the passage of the measure, as this was seen to bring down the prices of the staple by P2 to P7 per kg.

Panelo said competition among traders would pull down rice prices. “If you liberalize [the rice sector], there will be competition in the market, so they will be competing with lower prices.”