The National Food Authority (NFA) recently announced that it will no longer sell government-subsidized rice in select areas. The state-run food agency made the decision after its stockpile, which consists of rice bought from local farmers and imports, fell to 93,000 metric tons (MT), enough to supply the country’s requirement for three days. The depletion of the NFA’s buffer stock also came at a time when farmers have already harvested their main crop.
The food agency currently attached to the Office of the President is mandated to stabilize the price and supply of grains in the country. In keeping with this mandate, the NFA buys paddy from farmers at P17 per kilogram, depending on the quality, during harvest. The food agency also imports rice to augment its stocks.
The NFA increased its purchases of palay from farmers after the global food-price crisis in 2008. The Philippine government had wanted to import rice at the time, but could not buy the volume it needed because exporters did not have enough supply. The poor had to line up for cheap NFA rice, which was sold at P18.25 per kg in 2008. Commercial rice was sold at around P30 per kg.
The signals from the government, as well as the consequent hike in prices, caused panic among consumers who bought more rice to store at home. The government said unscrupulous traders also took advantage of the situation by hoarding rice in the hope of gaining more profit. Hoarders knew that Filipinos would be willing to shell out more for their staple food.
But, unlike in 2008, NFA officials said the current rice inventory of the country is enough for 90 days. What is worrisome, however, is that most of the inventory is with commercial traders and households. The NFA has also now refused to divulge its current rice inventory and has only made assurances that it would be able to supply the rice requirement of calamity-affected areas. Further compounding the situation is the fact that the NFA Council has rejected the NFA’s request to import rice to beef up its stocks. Government officials must cross their fingers and/or pray that the country would not be hit by a strong typhoon from now until March and that Mayon Volcano’s subsequent eruptions will not be disastrous.
The most that the NFA could do now is to step up its price monitoring. The food agency has already vowed to do this, but it must be more vigilant in calamity-affected areas like Albay, where food production is affected by the activity of Mayon Volcano. The food agency’s vigilance is also needed at this time, when it has suspended the sale of subsidized rice in urban areas.
After lifting the quantitative restriction (QR) on rice, Congress must immediately focus on amending other policies that impact on rice production and distribution. If the Duterte administration really intends to get out of its current practice of buying rice at a high price and selling it low, it must stop dragging its feet on amending the NFA’s charter. It must also be clear about its rice policy, in view of its decision to remove the QR on the staple. Government managers are vocal about the advantages of removing import quotas, but the strategies to help local producers cope with more rice shipments from abroad have yet to be put in place.