Let traders import rice freely–experts

Local economists called on the Duterte administration to remove the legal monopoly of the National Food Authority (NFA) to import rice if it wants to stabilize the price of the staple.

According to economists belonging to the Foundation of Economic Freedom (FEF), it is only when the government is given the sole authority to import the staple that the Philippines faces periodic situations of unstable supply with rising rice prices.

“If private traders can freely import rice, they can quickly respond more to the needs of the rice market. The price of rice in our rice-exporting neighbors is about half the domestic price of rice,” the FEF said in a statement sent over the weekend.

“There is no reason rice prices should become unstable and rise since there is plentiful supply from our neighboring countries that can be easily tapped by our private traders,” it added.

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The FEF also said the NFA is “at fault for giving the rice cartel room to manipulate rice prices” simply because it failed to immediately import rice when its stockpile started to go down below the required  15-day level.

The economists said the NFA did not restock its emergency rice inventory to the required 15-day level in case of emergencies and natural calamities. This despite the the Marawi City siege and the eruption of Mayon Volcano in Albay.

The FEF said the rice stock in NFA warehouses caused rice traders to get “greedy” and raise rice prices to P40, P45, P50 or P60 per kilogram (kg), depending on the quality.

The group noted that it was only at this time when the NFA sought the President’s clearance to import 250,000 metric tons of rice to beef up its supply, a move that would have been more effective if done sooner.

Last month the NFA said it sought the NFA Council’s (NFAC) go signal to import rice as early as November.

“If the NFA had the stocks, NFAC Chairman Leoncio Evasco can address this issue by injecting more NFA rice into the market. But without adequate stocks, NFA cannot effectively bring down the price. Accordingly, the poor will have to pay more for the rice,” FEF said. “This shows that behind every attempt by the rice cartel to manipulate rice price is a mistake of the NFA.”

Earlier, senators urged the government to raise the support price of the NFA. The increase in its buying price aims to encourage farmers to sell their harvest to the food agency.

National Economic and Development Authority (Neda) Undersecretary for Planning and Policy Rosemarie G. Edillon, however, said that apart from the indebtedness of the NFA, increasing the support price of the NFA would accelerate inflation.

Also, prices become volatile whenever the NFA imports rice and then floods the market with cheaper rice. This causes commercial rice prices to decline steeply.

While it has yet to run the estimates of how much a P1 to P3 hike in NFA support price will impact on inflation, Edillon said it is likely that the Nedawould thumb down proposals to increase it.

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A professional journalist for over a decade, Cai U. Ordinario currently writes macroeconomic and urban development stories for BusinessMirror. She has received awards for excellence in reporting on the macroeconomy and statistics. She was also cited for her contribution to statics reporting by the National Statistical Coordination Board (now the Philippine Statistics Authority). She is a recipient of journalism fellowships including the Jefferson Fellowship from the Honolulu-based East West Center. She is currently completing her Masters degree in Communication at the University of the Philippines. She graduated with a degree of Bachelor of Arts Major in Journalism from the University of Santo Tomas.