AGRICULTURE Secretary Emmanuel F. Piñol said on Monday that the country may have to grapple with an oversupply of rice, as the schedule of arrival of additional rice imports coincided with the harvest season, which started in late September.
In compliance with the President’s directive to “flood the market with rice,” the National Food Authority Council had approved the importation of 750,000 metric tons [MT] of rice to beef up its stockpile.
“By the end of this year, we will have a buffer stock good for 134 days. So, there is a danger actually that we may have an oversupply of rice,” Piñol, who is also NFAC chairman, told reporters in a news briefing in Malacañang on Monday.
“That [danger of oversupply] is precisely the reason why the National Food Authority [NFA] last Tuesday launched a buffer stocking program in Mindoro and we will start buying farmers’ produce to protect them from plummeting palay prices,” he added.
Piñol added that he received complaints from Nueva Ecija farmers that the average farm-gate prices of rice have gone down to as low as P16 per kilogram (kg), from as high as P25 per kg.
“We will focus on local procurement now since we have sufficient imports. The locally procured palay will form part of our buffer stocks for 2019,” he said.
The 750,000 MT that the government will purchase will be shipped in tranches, with the first 250,000 MT arriving in November. This was earlier purchased via open tender by the government.
The remaining 500,000 MT would also most likely be procured via open tender. The government will also hold an auction for 250,000 MT of rice imports on October 18.
“The traders bought palay at a high price to be able to exploit the situation to the point that the only way we could stabilize the rice situation was to bring in imported rice,” he said.
Apart from the increase in imports, the NFAC chief said he expects rice prices to stabilize in the last week of October as the government will institute reforms in the local grains industry and set suggested retail prices (SRPs) for rice varieties.
Piñol said he will meet with rice farmers and other stakeholders on October 18 to determine the SRPs for regular-milled rice, well-milled rice, long grain head rice and special rice.
“Starting next week, [consumers] will immediately see in wet markets that a variety is local or imported. We will do away with deception in the marketing of rice,” he said.
“We will simplify the identification of rice according to their broken percentage: regular-milled rice, well-milled rice, premium rice and special rice,” Piñol added.
Assurance
The agriculture chief also made an assurance that rice sold by the NFA will no longer go missing next year as he is confident that the NFA would have ample buffer stock.
Piñol is banking on the grant of additional incentives to shore up the palay procurement program of the state-run food agency.
“The government is determined to buy more. We expect to procure a huge volume,” he said.
In a separate statement on Monday, NFA OIC Administrator Tomas Escarez said the food agency may even be able to exceed its 2018 procurement target of 2.6 million bags this year due to the additional incentives.
“With the approval of the guidelines, NFA’s 279 buying stations nationwide will now start accepting palay deliveries from farmers with the new price incentive,” the NFA said.
The NFA is now buying palay at P17 per kilogram support price, with a P0.70 incentive for delivery and cooperative fee plus P3 per kilogram as “buffer stocking incentive.” Piñol also disclosed that the DA is now formulating guidelines to provide more incentives to farmers selling palay to the government.
“During the next harvest season, the government will provide seed incentives. If a farmer will deliver palay to the NFA, he will be given good-quality seeds, either inbred or hybrid, which will cover 1 hectare,” he said.
Piñol said the impending suspension of the second tranche of the fuel excise tax hike next year would help boost farmers’ production. He said this would stabilize production cost and food prices.
“In the case of captured fisheries for example, 60 percent of their total expense is in fuel. So, it is a significant thing if the excise tax on fuel would be suspended,” he said.
Image credits: Nonie Reyes