DESPITE the absence of a concrete study on its impact, the National Economic and Development Authority (Neda) assured the public that the removal of regulatory powers of National Food Authority (NFA) will not lead to higher rice prices.
The rice tariffication bill and the implementing rules and regu-lations (IRR) will contain measures that allow the President to intervene on behalf of public interest, Neda Assistant Secretary Mercedita A. Sombilla said in a recent phone interview.
Sombilla said the bill, which is now with the President for signing into law, will also outline the phases of the removal of NFA’s regulatory powers. She said the removal of NFA’s regulatory function will not be done immediately.
“Trade liberalization is the way to go for any market especially if you want competition. So you don’t really need to study especially since you can already see [that because] it’s very much regulated, we are not able to enjoy the prices that we should be taking advantage of in the world market,” Sombilla pointed out.
The Neda official said the Governance Commission for government-owned and -controlled corporations (GOCCs) or GCG will be in charge of the restructuring plan for the NFA.
Sombilla also said that during meetings with farmers, Finance Secretary Carlos G. Dominguez III explained what the bill is about and how it can help farmers and the entire country.
She said Dominguez also cited as examples the fertilizer and oil trade, which improved on account of liberalization. While prices temporarily increased, they eventually stabilized after stakeholders were able to get “accustomed” to the changes, she added.
“The benefits of liberalization [were] really for the long term. And that’s going to happen to rice. The private sector knows better, they know when to import, they know what to import,” Sombilla said.
No queues
Further, the marching orders of the President during the meeting was to prevent any queueing when it comes to buying cheap rice, something that happened in 2012. There were also pockets of NFA rice queues last year due to the spike in inflation.
Sombilla said the President told the farmers in the meeting to list down their concerns and submit them to him. He will then instruct the economic team to answer all these concerns.
This, Sombilla said, is already an indication that the President was not likely to veto the rice tariffication bill.
“Just to make the story short, the least intervention from the government, market to play, the most benefit that would go to the…greater majority, that’s what he [President Duterte] said. [He added] so list down all your concerns, I will let my economic managers, my cabinet secretaries to look at them and instruct them to respond to it considering that the response should take into consideration what is best for the people. The message [from the President] was clear. To us it was clear,” she said.
Earlier, Socioeconomic Planning Secretary Ernesto M. Pernia said through rice tariffication, affordable rice can be obtained from various sources and need not be the sole responsibility of the NFA.
The rice tariffication bill amends the two-decade-old Republic Act 8178, otherwise known as the Agricultural Tariffication Act of 1996, and replaces the quantitative restrictions (QR) on rice imports with tariff.
The bill, ratified by both chambers of Congress on November 28, 2018, is set to be transmitted to Malacañang for the President’s signature.
Under the new rice importation regime, legitimate rice traders can now import rice without NFA permits, provided they secure a sanitary and phytosanitary import clearance from the Department of Agriculture-Bureau of Plant Industry (DA-BPI) and pay the appropriate tariff to the Bureau of Customs.
The NFA, on the other hand, will focus on ensuring sufficient buffer stocks to address emergency situations. As there is a need to periodically replenish the buffer stocks, the NFA can still sell cheap rice, but to very targeted markets.