AS early as January 2018, the National Food Authority sounded the alarm about an impending rice shortage, but nobody in the government seemed to heed the warning. The NFA said its stockpile, which consists of imports and palay bought from farmers, had fallen to a precarious level. From the usual 15 days required by the Legislative-Executive Development Advisory Council, the consultative and advisory body to the President, the food agency’s rice stockpile declined to an alarming three days of national requirement. (See “NFA wants to import rice soon as stockpile good for only 3 days” in the BusinessMirror, January 12, 2018).
When everybody woke up to high rice prices, all accusing fingers pointed to the NFA. Government officials seemed to forget that it was the NFA that sounded the alarm in the first place. Vacillating policy-makers should by now realize how their inaction worsened a critical situation—the spikes in the retail prices of the staple. It did not help that some key personalities in the Duterte administration were reportedly distrustful of NFA chief Jason Y. Aquino.
Their distrust of Aquino may have caused the foot-dragging rush to solve NFA’s rice stockpile problem. Their disinclination to come to NFA’s aid was only matched by their fierceness to examine the agency’s operations under a microscopic scrutiny.
Rice, being a political commodity, attracted the attention of those who wanted some airtime or media attention. The food agency and its officials were crucified purportedly for the errors of their ways, including the way they handled the procurement of palay from Filipino farmers.
The circus that followed after the NFA sounded the stockpile alarm came amid an avalanche of increasing consumer prices partly caused by the implementation of the Tax Reform for Acceleration and Inclusion law. Merchants conveniently pointed to the TRAIN law as the culprit behind rising prices, saying excise taxes on fuel created a domino effect on the price of manufactured goods and farm products.
In 2017 the NFA’s rice stockpile was nearly wiped out. Despite this, however, the increase in rice prices was minimal, averaging 2 percent during the lean season or the period when palay harvest declines significantly. Retail prices remained steady even after the buffer stock of the food agency went down nearly 90 percent year-on-year toward the end of 2017. This happened because there was no TRAIN law that could be used as an excuse by unscrupulous traders to jack up prices.
The carryover stocks of the NFA starting on January 1 should have forewarned the government of the possibility of a rice price crisis—an economic problem that could have been averted with foresight. Why concerned personalities in the Duterte administration knowingly ignored the lessons of 2017 is anybody’s guess.
Now that the country is faced with a rice price crisis, the government must come up with an economic solution—not just rhetoric. Unless something drastic is done in the remaining months of 2018, the country will continue to deal with spikes in rice prices.
Revamping the NFA and taking care of the country’s food-supply situation are two separate things; the Duterte administration must prioritize one over the other. The government must also consider long-term solutions, such as investing in reliable data on rice consumption. (See “Snapshot of rice-consumption data remains grainy as Pinoys grapple with supply, prices” in the BusinessMirror, August 30, 2018). Effective long-term solutions to the country’s rice situation can only come after
accurately assessing the problem.
Image credits: Jimbo Albano