The government’s palay-buying price should go up to P20 per kilogram (kg) so the National Food Authority (NFA) could buy more local paddy to beef up its stockpile, Agriculture Secretary Emmanuel F. Piñol said on Wednesday.
As traders could take advantage of the increase in the NFA’s support price, which has been in effect since April 2008, Piñol said the NFA Council (NFAC) must also institute measures that will prevent commercial rice prices from skyrocketing.
“It will be good to increase the buying price of the NFA so they can compete against traders and buy local palay, instead of importing rice,” he told reporters in a news briefing in Quezon City on February 14.
“But there should be a caveat because any increases in the NFA’s buying price would encourage traders to raise their price. While it’s true that farmers will benefit from higher palay-buying price, consumers will be affected. This should be considered,” Piñol added.
The chief of the Department of Agriculture (DA) said the “ideal” NFA support price is P20 per kg, P3 higher than the current P17 per kg. At P20 per kg, he said the government could still sell rice at P36 to P38 per kg.
Piñol also said the removal of the quantitative restriction (QR) on rice via the amendment of Republic Act (RA) 8178 will not guarantee that the staple would become cheaper.
“One of the country’s economic managers said importing rice will effectively cut prices by P7 per kg. I question that. In fact, imported rice is being repacked by traders and sold as commercial rice,” he said.
“Rice traders would become richer, but [more imports due to the lifting of the rice QR] would not benefit consumers,” Piñol added.
Production shortfall
Based on the computation of the DA, the Philippine Rice Research Institute (PhilRice) and the International Rice Research Institute (Irri), Piñol said the country’s rice production shortfall last year was around 400,000 metric tons (MT).
He also said the Philippines achieved a 96-percent self-sufficiency rate (SSR) on rice in 2017 based on the computation of the DA, PhilRice and Irri.
Piñol said the country’s paddy output of 19.3 million metric tons (MMT) last year was equivalent to around 13.1 MMT of milled rice at an average milling capacity rate of 65 percent. This, he added, was “above and beyond” the country’s annual estimated rice requirement of about 11.2 MMT.
“But the government is not declaring rice self-sufficiency yet as there are factors to be considered. Part of the 19.3 MMT will have to be used for seeds, a certain percentage is considered waste, and there is also the government’s buffer stock, which is not included in computing the sufficiency rate,” Piñol said.
The Philippine Statistics Authority (PSA), the government’s official statistical agency, will release a report on the country’s food self-sufficiency ratio for 2017 in October.
The latest available PSA report indicated that the Philippines reached a 95-percent SSR on rice in 2016, after producing some 17.6 MMT of palay.
“Even if we achieve rice sufficiency by 2020, we will not be able to sustain it for so long because of population growth. The best scenario would be about five to 10 years,” Piñol said. “The growth of our population will overtake rice production because our rice farms are already limited.”
NFAC scrutiny
D.A. Undersecretary for Operations Ariel T. Cayanan said the NFAC will scrutinize the NFA’s palay-procurement and rice-distribution schemes to determine the food agency’s impact on the country’s rice market.
Cayanan added the NFAC approved a resolution ordering an audit of the NFA’s programs to ensure that there are no lapses in the strategies employed by the food agency to fulfill its mandate.
“It is not a presumption of guilt or prosecutory. We are not assuming that [NFA] is doing something wrong,” Cayanan told reporters in an interview on February 14. “All the NFA’s programs will be evaluated. The government always presumes regularity.”
Cayanan was invited by the NFAC as a resource person during its meeting on February 12. The DA is currently not part of the council, the highest policy-making body of the NFA.
Under the resolution, the NFAC would find out how and where the NFA distributed government-subsidized rice sourced through imports and local palay procurement, according to Cayanan.
Cayanan disclosed that it was Central Bank Deputy Governor for the Monetary Stability Sector Diwa C. Guinigundo who proposed the resolution on the audit of the NFA’s programs. “It is in a form of resolution that was actually seconded by the council. But no timeline was given as to when it will be undertaken.”
Piñol commended the NFAC’s decision to audit the state-run agency, saying it is high time for the government to look into claims that the NFA favors some traders.
NFA Administrator Jason L.Y. Aquino said he welcomes the NFAC initiative. “NFA management welcomes the audit to shed light on issues regarding our distribution. Distribution levels vary in each provinces and island-municipalities because they have different daily-consumption requirement.”
“Some are palay-procuring and some are not. Also, there are provinces that have high poverty incidence like NCR, thus requires higher distribution,” Aquino added.
1 comment
NFA is corrupt!