Gov’t sets review of NFA rice procurement subsidy

MANILA, Philippines - The government is set to review whether it will continue providing subsidies for rice purchases as it seeks to reduce the National Food Authority’s (NFA) debt, a Cabinet official said.

Presidential Assistant for Food Security and Agricultural Modernization Francis Pangilinan told reporters yesterday the review on subsidies would be discussed in a meeting that would thresh out the NFA’s road map over the next two years.

He said the meeting, which is scheduled on July 16, would look into different topics including the minimum access volume for imports, quantitative restriction on rice, as well as how to trim the debt of the NFA which amounts to P160 billion.

The state grains agency’s debt covers imports, subsidies and other expenditures.

The NFA’s subsidy comes in the form of procurement of palay or unmilled rice.

“Before the end of the July, we will have a clear picture,” Pangilinan said.

To address the hike in rice prices and to increase the government’s buffer stocks, Pangilinan said the government would import an additional 200,000 metric tons (MT) of the staple.

The 200,000 MT to be imported, would be on top of the previously announced volume of 800,000 MT to be purchased from overseas this year.

Pangilinan said the government may conduct a repeat order for the additional rice imports, citing the procurement law which provides that direct procurement of goods from the previous winning bidder could made when there is a need to replenish the items.

“The imports should arrive during the lean months. It can’t be in September because there is schedule of harvest in September and October,” he said.

Asked if imports of rice by the private sector would be allowed this year, he said the government still needs to monitor developments.

“We will look at an El Niño impact, supply situation and then we will decide if we will allow private sector importation,” he said.

Meanwhile, farmers and civil society groups such as Rice Watch and Action Network, Alyansa Agrikultura, National Rice Farmers Council and Pangisda-Pilipinas have called on the National Price Coordinating Council to set a price ceiling at P39.50 per kilo for commercial well-milled rice to ensure there is available and affordable supply of the staple.

In a statement, the groups said there is shortage of affordable rice in the market today.

“Unless the government acts decisively to arrest unscrupulous traders who manipulate prices to assure profits into the pockets, the current average price of P43 per kilo of rice will become the new normal. As a matter of fact, there are several stores selling rice at P45 per kilo and higher. This is dangerous because it may spur increase in hunger incidence and the government’s touted economic gains will remain elusive to the poor majority of the population,” National Rice Farmers Council spokesperson Jaime Tadeo said.

According to the Bureau of Agricultural Statistics, the average retail price of rice in the third week of June is P42.85 per kilo and has been continuously increasing from P41.57 per kilo in April to P42.19 per kilo in May.

The average price of rice in June 2013 was P35.31 per kilo.