NFA importations harm consumers – rice network

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The Rice Watch and Action Network (R1) on Tuesday criticized President Benigno Aquino 3rd for declaring more rice importations by the National Food Authority (NFA), saying that this form of consumer protection is a “dangerous precedent.”

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“To import more rice in order to strengthen local stocks and protect consumers from un–scrupulous traders is a danger–ous model. Announcing this among the policy directions in his SONA [State of the Nation Address] is like saying the NFA will be relying on imports for its buffer stock,” R1 convenor Aurora Regalado said in a text message.

Instead of espousing trade liberalization, Regalado added, the NFA should be harnessing its power to influence palay (unhusked rice) price support to truly serve the local farmers who are the President’s “bosses.”

In his fifth SONA on Monday, Aquino announced that the NFA Council has approved a standby volume of 500,000 metric tons of rice as part of the grains agency’s preparations against possible calamities and high rice prices.

That volume is on top of the 500,000 MT of rice to be imported by the state-run NFA next month, and the 800,000 MT imported from Vietnam in April. This brings Manila’s rice imports to a four-year high of 1.3 million MT.

But with the standby volume ready to be procured anytime, either by a repeat order or an open bidding, the government may bring the rice imports closer to the 2009 level of 1.8 million MT.

Assistant for Food Security Francis Pangilinan, currently the NFA Council chairman, said the standby volume is necessary to ensure stable supply of affordable rice.

“The standby authority covers up to 500,000MT . . . but it may or may not be exercised. Assuming it is exercised it may be less than the ceiling,” Pangilinan said.

The NFA was compelled to hike rice import requirement as it continues with the high rate of withdrawals in government-owned warehouses, possib- ly depleting stocks to criti- cal levels.

Pangilinan earlier directed the NFA to increase daily rice stock to 10,000 metric tons from 6,000 metric tons to cushion the effects of rice price increases.

NFA sells regular milled rice at P27 per kilo and well-milled rice at P32 per kilo.

Aquino, in his SONA, said flooding markets with cheap NFA rice would also help force unscrupulous traders to release their stocks. NFA rice is cheaper compared to commercial rice, which has shot up to an average of P45 per kilo last month.

“Rice could only be stored for a maximum of six months. Once the additional imports, and more government rice distributed to markets, these unscrupulous traders will be forced to release their stocks or face financial losses,” he noted.

Massive disbursement of government rice stocks, however, proved to be ineffective as high prices prevailed in major mar-kets in Metro Manila and near-by provinces.

As of July 25, the Philippine Statistics Authority-Bureau of Agricultural Statistics said retail prices of well-milled rice averaged P43.64 per kilo, or 0.25 percent higher that the previous week and 18.94 percent higher than a year ago.

Also, prices or regular milled rice increased by 0.35 percent to P40.29 per kilo, from last week’s P40.15 per kilo.

Agriculture Secretary Proceso Alcala said they continue to pursue the government’s rice self-sufficiency targets and ensure availability of the staple in time of crisis.

“Our marching order from President Aquino is to be rice self-sufficient. We are striving to hit that goal,” Alcala added.

Amid mounting rice impor–tations by the NFA, he reiterated that it is necessary for the country to hit 100 percent rice sufficiency to avoid being held captive by rice-exporting countries.

Rice is a thinly traded commodity and world trade is highly concentrated, with only 7 percent of the total global production sold outside national borders. The top five exporters account for 80 percent of the total exports, making importing countries vulnerable to export bans or restrictions.

“At 96 percent sufficiency, I can say that we are on the right track. Our goal now, along with the becoming 100 percent sufficient in rice, is to make our palay farmers more globally competitive by lowering production costs,” the DA chief said.

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