Agriculture Secretary Emmanuel F. Piñol is pushing for the retention of the marketing functions of the National Food Authority (NFA) even after the quantitative restriction (QR) on rice is scrapped to ensure stable prices.
“While there are diverse views on what the role of the NFA should be, I still maintain that the NFA could be an effective marketing and trading arm of our Filipino farmers and fishermen if managed properly and given guidance,” Piñol, who now chairs the NFA Council (NFAC), told the BusinessMirror on Thursday. Piñol added the marketing functions of the NFA would even be more vital in a post-QR regime, when imports are expected to flood
the domestic market.
The Department of Agriculture (DA) chief echoed the sentiment of NFA Administrator Jason L.Y. Aquino, who wanted to retain the function of the food agency even after the rice QR is removed. In early April Aquino argued that the NFA’s food-security role should even be strengthened under a post-rice QR regime.
“Food security should never be left to the mercy of trade regimes. Rice is the most basic food of Filipinos. In an era of boundless influx of rice imports into the country, the government should be more vigilant about maintaining adequate levels of the staple and to make it constantly available and accessible to all at affordable prices,” he said in a statement.
“The NFA believes that there should always be a National Rice Reserve even under a time of surplus because rice production is never assured or certain at all times. This would also spare the country from exposure to price volatility brought about by global political and economic shifts,” he added.
Economic managers have been vocal in removing the commercial and marketing functions of the NFA once the country’s rice importation is tariffied, leaving it with its buffer-stocking role.
“The NFA should really just focus on ensuring adequate buffer and regulation [of the market]. They should no longer be involved in buying [and] trading,” Socioeconomic Planning Secretary Ernesto M. Pernia told the BusinessMirror in February.
In the meantime, the government has put on the back burner the restructuring of the NFA to focus on converting the QR into tariffs. National Economic and Development Authority Assistant Secretary Mercedita Sombilla said the government will restructure the NFA right after the law removing the QR on rice is passed by Congress.
An NFA official told the BusinessMirror that removing the commercial power of the grains agency while retaining its buffer-stocking role is “problematic” as its stockpile could rot due to the removal of possible disposal channels.
“Rice should be distributed every six months because it cannot stay for so long as its shelf life is only limited. So, if we only have a [buffer stocking] role, how can we sell or dispose our stocks by the sixth month when we need to refresh our stockpile?” said the official, who requested anonymity.
“So the stocks could rot. That’s why there is a need for other schemes, such as selling, to dispose the stocks [especially if there is no calamity],” the official added. The DA chief said he also wants to expand the NFA’s functions to become the country’s trading agency for agricultural commodities.
“My personal view is that the NFA has been perceived as a rice agency, which isn’t the case. The World Trade Organization recognizes the NFA as the only state trading agency of the Philippines,” Piñol said.
“This means that the NFA could trade on behalf of Filipino farmers and fishermen, as farmers and fishermen are usually the ones organizing themselves and finding the right market for their products,” he added.
Piñol said the NFA could even earn more revenues by functioning as a state trading agency, similar to India’s Agricultural and Processed Food Products Export Development Authority (APEDA) and Hanoi’s Vietnam Southern Food Corp.
“Government help in consolidating the products of farmers and representing them in global trade is minimal. Why can’t the NFA perform that function?” he said.
“Maybe the NFA will earn more if it will act as a consolidator and trading agency of Filipino farmers and fishermen who only need assistance from the government,” Piñol added.
The agriculture chief said a technical working group would study the feasibility of his proposal and make recommendations to the NFAC.
Image credits: Nonie Reyes