Jasper Emmanuel Y. Arcalas & Cai U. Ordinario
Economists said the removal of the quantitative restriction (QR) on rice will make the staple cheaper but a group of farmers believe that “unclear” provisions in the proposed Rice Tariffication Act would create “serious” problems for the government.
Raul Q. Montemayor, national manager of Federation of Free Farmers Inc. (FFF), said a lot of issues concerning the rice tariffication bill have been “discovered” since the government started crafting the implementing rules and regulations (IRR) for the measure.
One of the issues that have been discussed by the working group on the IRR are the consequences of the removal of the licensing power of the National Food Authority. Montemayor said the scrapping of the NFA’s regulatory power would not only mean the loss of its supervision over importers but, as well as its capacity to license warehouses, truckers and even rice retailers.
This, Montemayor said, could lead to various problems such as the entity that will inspect the warehouses to determine the country’s rice inventory and how the government would ensure that enough rice would be sold in local markets sans the proper documentation of retailers.
“This means now that anyone could sell rice without license as no one would stop them from doing so. And the problem with that would be, how would we determine if they are selling smuggled rice or those staples are not adulterated or substandard?” he said.
“The government would not be able to trace who sold the rice and where it came from as the enforcement power of the NFA has been removed. It now becomes a food safety issue,” he added.
At present, the NFA inspects commercial warehouses to obtain information on their inventory, which it reports afterward to the Philippine Statistics Authority (PSA).
He added that these problems are being addressed by the IRR working group to ensure that an effective system will be in place once the proposed Rice Tariffication Act is enacted.
Under the IRR, the removal of the NFA’s regulatory and market powers would be done in phases, which might take less than a year, to give time for the acquisition and training of new personnel that would implement the provisions of the bill, according to Montemayor.
Possible delays
Another problem being tackled by the IRR group is the disbursement of money from the Rice Competitiveness Enhancement Fund (RCEF).
Montemayor said the procurement of machines and seeds by the Philippine Center for Postharvest Development and Mechanization and Philippine Rice Research Institute, respectively, should be undertaken by their central offices and could not be relegated to the Department of Agriculture’s regional offices.
Also, Montemayor noted that unlike the Agricultural Competitiveness Enhancement Fund (ACEF), interests earned from the RCEF loans would go directly to the National Treasury.
He added that the rice tariffication bill lacked a provision or language that would mandate that the interests earned from the RCEF would revert to the fund.
Montemayor said the first draft of the IRR could be finished within the month but its approval might take longer as it would have to undergo a series of public consultations.
Economists’ appeal
The Foundation for Economic Freedom (FEF) said the QR on rice only made the staple “expensive” and “out of reach” for the poorest Filipinos.
The FEF also said the sooner the President signs the rice tariffication bill into law, the better it would be for Filipinos.
“The time for timid half-measures is over. It is now the time for bold and confident steps. Change is coming for the rice industry, Mr. President. The sooner you make it happen, the better,” FEF said in a statement.
The FEF also said the bill will also address issues surrounding inefficiencies in the NFA which has been in control of the country’s rice importation, trade, processing and logistics since 1972.
Through the years, the group noted that the NFA’s debts ballooned to P150 billion amid corruption concerns and other issues.
These were the same reasons the economic team decided to remove the licensing function of the NFA in the proposed bill.
Budget Secretary Benjamin E. Diokno, prior to his appointment in the Duterte Cabinet, and the late Socioeconomic Planning Secretary Cayetano W. Paderanga Jr. already pushed for the abolition and/or overhaul of the NFA in 2011.
In 2011, Diokno and Paderanga said the overhaul of the NFA will not cause any increase in rice prices. However, Diokno said abolishing the NFA would have been a “better” proposal for Congress.
Image credits: Roy Domingo