• Rice importation need not be controversial



    The National Food Authority (NFA) planning to import 250,000 metric tons (MT) of rice has made news again, and Agriculture Secretary Emmanuel Piñol and Socioeconomic Planning Assistant Secretary Mercedita Sombilla have stated their opposition on the issue the past weeks.

    The Manila Times also reported on February 12 that Senators Cynthia Villar and Grace Poe have set an inquiry on the rice importation and why the NFA’s rice stocks have run low.

    In The Times article “No rice shortage, senators assure public,” Villar, head of the Senate Committee on
    Agriculture and Food, said there is actually no shortage of rice in the country and that only NFA stocks have run low.

    Again, rice importation has become a controversial topic.

    This is the second time that I will discuss the rice importation issue, and the first time I wrote about it was on May
    5 last year (‘Rice importation need not be controversial’).

    So should rice importation be a controversial issue? My answer: if properly planned and executed, rice importation need not be a controversial issue at all.

    In fact, news that the NFA will be bringing in the 250,000 MT of rice in July this year, which is around the “lean months” of production, is a good development. So again, rice importation need not be controversial.

    The first time I wrote about the issue, I stated that the country needs to import rice because the Philippines has not been able to produce 100-percent of its requirement for the staple. Today, the country produces about 96 percent of its rice requirement.

    While there are calls for a Senate probe into rice importations, let us not jump the gun on the agency itself, because in the first place, the NFA may really have a need to shore up its rice stocks through importation alongside buying from local farmers. And I see nothing wrong with that.

    From what I have read so far, the reserve rice stocks of the NFA is down to about two days, which is a critical level. The agency should at most times maintain a buffer stock of at least 15 days.

    Although the country does not have a shortage of rice stocks, based on latest media reports, news that NFA rice stocks are running low is bad news for the poor, and the poorest of the poor.

    NFA rice usually retails at P27 to P34 per kilo, and is much cheaper than commercial rice whose price can reach P40 per kilo. Supermarkets are also selling rice at much higher prices or up to P60 per kilo.

    So there is really no need to debate on whether the NFA should import rice stocks to shore up its buffer stocks to the safe 15-day level.

    However, what made the latest plan to import rice is it was announced nearing the next harvest season, which starts next month or March.

    If the NFA had decided on the need to import rice in the last two to three months of the year, vis-à-vis the projected production for 2017 (in this case), and had the stocks delivered in January of this year, I believe the issue would not become controversial like it is now.

    Good thing the NFA said recently the imported rice stocks will arrive in the country sometime in July.

    NFA not under DA

    What also made Piñol not see eye-to-eye with the NFA is the agency is no longer under the DA, which is still the lead agency that invests in programs and projects related to rice production in the Philippines. The Agriculture secretary used to chair the NFA Council, which is logical because it is him or her who knows first hand local rice production trends.

    But the NFA along with the National Irrigation Authority (NIA), Philippine Coconut Authority (PCA), and Fertilizer and Pesticides Authority (FPA) were transferred from the DA to the Office of the President on May 5, 2014 under the Office of Presidential Adviser for Food Security Modernization by virtue of Executive Order No. 165.
    So at present, Piñol is just a member of the NFA Council and not its chairman.

    Nonetheless, the NFA can still perform the function as the main supplier of rice for the masses, particularly the poorest of the poor.

    The NFA can also revive the Kadiwa stores that were popular during the Marcos administration.

    The revived Kadiwa stores, which should not necessarily be named Kadiwa, can also be made part of government’s Pantawid Pamilyang Pilipino Program (4Ps), or only those who are enrolled as beneficiaries of the program will be able to purchase goods from the stores at levels below the prices of public markets, supermarkets, groceries, and even sari-sari stores.

    Part of the NFA stocks should also be prioritized for distribution to areas hit by calamities, and it is heartening to know that the agency has distributed a large volume of its stocks to people displaced by the eruption of Mount Mayon in Albay.

    Also, the NFA should stop selling to private traders. There have been allegations that private traders mix less costly NFA rice with commercial rice. If there are syndicates in the NFA involved in selling rice to private traders for mixing with commercial rice, then these people should be held accountable.

    Consider 180-day buffer stock

    In case the NFA imports excess stocks, that would provide an opportunity to increase its reserve level to more than 15 days and take the lead in making the country have a buffer stock of 180 days over the long term. This is a policy proposal.

    India maintains a buffer stock level of 360 days or one year, which has proven effective in checking price spikes and price manipulation by traders. And since it does not have any fear of rice shortages given its large buffer stocks, India has been aggressive in exporting rice, with its Basmati rice being sought by the upper crust of the market.

    If there is anything the country should be thankful about now, it is that local rice production is increasing. According to latest statistics from the Philippine Statistics Authority (PSA), palay (unmilled rice) production for 2017 reached 19.38 million MT, for a 9.36-percent increase over the 17.93 million MT recorded in 2016.

    But that may not be enough to supply 100-percent of the country’s supply for rice, which means imports have to be made to plug the deficit, no matter how small.

    The worst thing that could happen is affordable rice stocks for the poor, including NFA rice, will fall drastically short that will cause people to line up for rice at the retail stalls. And as I have stated in my column last year on rice importation, that cannot be good news at all.


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