The National Food Authority (NFA) is uncertain if it would still continue selling government-subsidized rice next year once the rice tariffication bill is enacted into law and its imported stockpile has been depleted.
NFA Council Chairman and Agriculture Secretary Emmanuel F. Piñol issued the pronouncement on Tuesday and explained that the bicam-approved rice tariffication bill did not state a clear provision on the future of the grains agency’s marketing functions.
Furthermore, Piñol aired concerns on who would now supply the Department of Social Welfare and Development’s rice needs once the measure is signed by President Duterte, which is expected before the year ends.
The finality if the NFA would stop selling affordable rice would be determined by the implementing rules and regulations of the enacted rice tariffication bill.
However, Piñol said if the NFA would continue to sell affordable rice to the public, then it would have to raise its price to avoid incurring losses that may cause the agency’s debt to balloon.
Piñol explained that under the rice tariffication bill the NFA is no longer allowed to import rice and would focus on purchasing palay from local farmers. This, according to him, would entail higher costs for the agency to process and sell it as rice.
The NFA is presently buying palay at a price of P20.70 per kilogram, which includes buffer stocking incentive, and sells rice at P27 and P32 per kg.
“If we procure locally, we cannot sell at P27 per kg as we will lose money. The recommendation of the NFA technical working group is that we sell rice at about P36 per kilo, so that we will not lose money,” he said in a news briefing on Tuesday.
Piñol also clarified that the NFA cannot anymore buy local palay beyond the P20-per-kg mark as it would mean that the agency must sell the staple at a higher price.
“It’s either we lose a lot of money or increase the selling price,” he said. “The new role of the NFA under the liberalization act would just that of a buffer stocking agency. We would just serve as a protection to the farmers,” he added.
At a P36-per-kg selling price, the NFA would be at breakeven level, according to Piñol.
Piñol said it is certain that the NFA would stop selling rice once its imported stockpile has been depleted after the rice tariffication bill is enacted into law.
“We cannot afford to subsidize rice anymore. The NFA’s debts would balloon,” he said.