The Federation of Free Farmers (FFF) on Thursday urged President-elect Ferdinand “Bongbong” R. Marcos Jr. to prioritize the review and amendment of the rice trade liberalization (RTL) law to pave the way for the reversion of the National Food Authority’s (NFA) function of selling rice in the market.
The FFF reminded Agriculture Secretary William D. Dar that his proposal of allowing the NFA to sell cheaper rice to poor consumers requires an amendment of the rice trade liberalization (RTL) law.
The RTL law did not just convert the country’s quantitative restrictions on rice imports into tariffs, but also deregulated the rice industry by removing several functions of the NFA, including the sale of staple in the domestic market.
Under the RTL law, the state-run NFA has been reduced to a buffer stocking agency that only responds to emergency situations and relief programs of government agencies.
“The DA [Department of Agriculture] and NFA will be violating the law if they pursue their proposal without the justifications stipulated by the RTL,” FFF National Manager Raul Montemayor said.
“We must remember that the law took away NFA’s original mandate to stabilize or influence rice prices and limited the agency’s role to maintaining buffer stocks for emergencies. The law has to be amended first before NFA can start selling subsidized rice again to consumers,” Montemayor added.
To this extent, the FFF urged Marcos Jr. to prioritize the amendment of the RTL law to “remove legal impediments to providing cheaper rice to poor consumers.” The group also pointed out that the amendment of the RTL law would allow revisiting certain provisions to “protect” rice farmers “from excessive imports and rising fertilizer and other production costs.”
Nonetheless, FFF also criticized Dar’s plan of reviving the NFA’s commercial functions, claiming that the scheme would just push the state-run food agency into huge debts like in the past.
“The NFA would lose at least P11.60 for every kilo of rice sold at
P27 per kilo, if it buys palay from farmers at P19 per kilo. This loss does not yet include the NFA’s processing, marketing and overhead costs,” the group said.
“Selling NFA rice at a very cheap price could inadvertently depress farm-gate prices, which will in turn force the government to again allocate scarce resources to prop up palay prices through NFA buying,” it added.
The FFF also raised concerns about Dar’s proposal, noting that it does not tune well with recent “claims” by the economic managers that the RTL law was “successful in bringing down the prices of rice.”
“The RTL’s proponents promised that rice prices would go down if we allow imports to come in freely without any restriction and competition from the government. Why are they now proposing to bring back NFA rice?” Montemayor said.
The FFF, meanwhile, proposed that the government consider hiking its cash transfers to 4Ps beneficiaries in lieu of providing them with rice. The group explained that this would “free the government from logistical headaches and the corruption and leakages that have hounded similar programs in the past.”
