THE government will not be able to intervene in the market when retail prices of rice shoot up due to hoarding and manipulation once the rice tariffication bill is enacted into law, House Deputy Speaker and former Agriculture Secretary Arthur Yap warned on Tuesday.
Yap, in a statement sent to the BusinessMirror via SMS, said the National Food Authority (NFA) will “lose its power” to sell rice in the market as it has been reduced to a buffer-stocking agency under the bicameral committee-approved Senate Bill (SB) 1998.
Due to this, Yap added that the NFA could not stabilize rice supply and retail prices in the market at times of shortage and disruptions.
The bill, which has been ratified by both chambers of Congress, is now awaiting the signature of President Duterte.
“People say that the situation of traders preying on the market through supply and price manipulation will now be remote since total importation will ensure that market forces will be the balancing force employed to keep the market in check. Well, in an ideal and perfect world, despite the Philippines being a logistics-challenged archipelago, that may be true,” he said.
“But how we operate in real life is another matter to consider. Let us just be forewarned that without the NFA’s market intervention power, then that is the possibility,” he added.
Nonetheless, Yap pointed out that the rice tariffication bill, which converts the country’s quantitative restriction on the staple into tariffs, is a “step in the right direction.”
Furthermore, Yap explained that there’s also a need to maintain the NFA’s regulatory power over imports, as the payment of duties by importers is sufficient to monitor the volume of rice entering the country.
“We must allow free private-sector imports of rice, period,” he said.
“The tariffs [that] importers will pay will allow the government to monitor the taxes paid and who is doing the importation—so we need not be worried about not knowing who and how much is being imported,” he added. However, Yap said certain provisions of the rice tariffication bill, particularly the utilization of the proposed Rice Competitiveness Enhancement Fund, could have been polished for better development of the sector.
“Also, the rice tariffication fund could have been improved to include irrigation funds to develop more rice lands, but now that that has not been included, we just need to be aware that cropping intensity of our rice lands should be included as a priority in our drive for greater food security for our people,” he said.
Yap’s statements came after business groups and economists urged President Duterte to immediately sign the rice tariffication bill. Farmer groups have been pushing for its veto as they want to retain the market and regulatory powers of the NFA.
Citing Sen. Cynthia A. Villar, Agriculture Secretary Emmanuel F. Piñol earlier pronounced that the NFA would continue to sell affordable rice in the market even after the rice tariffication bill is signed into law.
Under SB 1998, there is no clear language or provision that stipulates that the NFA will continue its present market intervention role of selling affordable rice.