Flawed rice importation policy blamed

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AS the country continues to hunt down “illegal rice importers,” two former heads of the National Food Authority (NFA) warned that flawed government policies pose bigger threats to the rice industry.

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In a statement, former NFA chief Anthony Abad said smuggling is just a symptom of a flawed system of rice regulation.

Similarly, former NFA chief Lito Banayo warned that government’s continued monopoly on rice importation could cause NFA’s debt to balloon to as much as P190 billion.

“Rice smuggling occurs because there is an unmet demand of a hungry population. Smuggling and the illicit importation of rice simply reflect a deficit in supply,” said Abad, a lawyer and international trade expert.

In the ongoing Senate hearings, the so-called illegal importations were blamed on the absence of a definitive policy on the World Trade Organization (WTO)-granted “special privilege” or quantitative restrictions (QR) on the importation of rice that had expired in June 2012.

The Department of Agriculture (DA) has maintained that despite its expiration, importation quotas on rice will remain in place until 2017, even as the Philippines has yet to succeed in negotiating an extension with fellow WTO member countries.

But Abad believes otherwise: “When you have an agreement that is time-bound, the “special treatment clause” expires upon the deadline. The Philippines is the only country left that maintains a QR.”

The DA and attached agency NFA have been criticized by some sectors for supposedly using QRs and the issuance of import permits to maintain a “monopoly” over rice trade.

Abad, who was NFA administrator from 2000 to 2002, agreed that the “outdated QR system and government rice monopoly, only lead to high prices, inefficiency, corruption, and smuggling.”

Banayo in a television said he was astonished at how NFA has come to monopolize rice trade over the last year.

“In the third year of the Aquino administration, 2013, I was surprised to read in the papers that it was only the NFA doing the importing, without participation from the private sector,” he said.

Supposedly, under the 2010 Food Staples Self-sufficiency Program (FSSP) or the rice self-sufficiency roadmap, importation should primarily be the role of the private sector.

“The private sector should be the one to import. The NFA should, little by little, remove itself from rice importation and concentrate on local procurement, which we followed for two years,” said Banayo, NFA administrator during the first two years of the Aquino administration.

He warned that the NFA’s continued monopoly over rice importation, through government-to-government transactions, is a virtual “white elephant,” costing the country billions in public funds.

“We are going to be deep in debt. I think, at the rate it’s going, mostly from government-to-government imports, we will reach P190 billion by the time [Aquino’s] term ends,” said Banayo.

Amid increasing prices, Banayo reminded the NFA to concentrate on two things: “one to make sure that there is available rice in the market, [and]two, to make it affordable.”

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