MANILA, Philippines — The farm gate price of paddy rice continued its upward trend for the third consecutive month after it posted an increment of 10 percent by end-March, the Philippine Statistics Authority (PSA) said.
Rice prices have been increasing since the start of the year, following the lack of supply of cheaper rice from the National Food Authority (NFA).
Under the law, the NFA is tasked to buy the palay produce of local farmers as buffer stock for calamities and as a stabilizer in the market to avoid jacking up prices of commercial rice.
In its regular update on palay, rice and corn prices, the PSA said the average price of palay went up to P20.46 per kilogram from P18.60 per kg last year. Week-on-week, prices were also up by less than one percent.
The average wholesale price of well-milled rice rose six percent to P40.69 per kg year-on-year, but week-on-week prices started to decrease by 0.05 percent.
The average retail price of well-milled rice increased to P43.46 per kg, up by five percent year-on-year.
The wholesale price of regular-milled rice was P37.13 per kg, seven percent higher than the previous year. Its average retail price also increased seven percent to P39.74 per kg.
Earlier, the PSA said the country’s rice inventory remained on a low note this year as it went down by 22 percent to 1.8 million metric tons (MT) as of February.
The PSA reported total rice inventory as of end-February was lower than the 2.3 million MT recorded in 2017 and was 22 percent lower than the 2.29 million MT recorded in the previous month.
Duterte to decide on NFA status
Aside from the depletion of NFA rice stocks, the grain agency’s status is hanging. The NFA, Department of Agriculture (DA), and even Malacañang are all in confusion and disagreement as to where the grain agency will really fall under.
Agriculture Secretary Emmanuel Piñol earlier said President Duterte ordered NFA’s return to the DA but presidential spokesman Harry Roque countered by saying NFA will remain under the Office of the President.
Duterte is expected to decide on the fate of the NFA after his official trip to China this week.
“Final word in the setup will be announced by the President when he comes back from China,” Piñol told The STAR.
An industry source said the Governance Commission for Government-Owned and Controlled Corporation (GCG) will study plans to scrap the functions of the interagency NFA Council.
The source said the GCG, which is under the Office of the President, is looking at the plans to have the NFA Council reconstituted, or even abolished.
“The GCG will study recommendation of dissolution or abolition of NFA Council. It will recommend reconstitution of the Council,” the source said.
The source added that no timeline has been set as to when it will start and will be finished but noted that “soon is desirable.”
Immediate importation
While the status of NFA remains hanging, the grain agency is focusing first on the immediate importation of the 250,000 MT of rice via the government-to-government scheme as approved by the President, NFA spokesman Rex Estoperez said.
NFA stocks have been depleted since last week. Duterte ordered the immediate replenishment of the government buffer stock to stabilize prices in the market.
The NFA is preparing the terms of reference for the importation from Vietnam and Thailand, which will likely arrive by end of May through the ports of Cebu, Davao and Manila.
Estoperez said the terms of reference “may be available anytime this week.”
The NFA Council is not in favor of the government-to-government scheme as this is more prone to corruption, but the mode is the easiest way to immediately replenish stocks.
Piñol also confirmed the emergency importation, saying this is the best thing to be done right now as NFA stocks have been depleted.
DA to help NFA
The DA will also help NFA boost its palay procurement to fill its depleted buffer stock inventory.
Piñol said he reached an agreement with NFA administrator Jason Aquino for an interagency cooperation on NFA’s palay buying nationwide.
Under the agreement, which will be formally signed this week, DA will identify areas where buying prices of palay are considerably lower and controlled by traders and middlemen.
“The NFA will focus its palay-buying operations in the areas identified by us and they will provide a space, or an area, in its buying stations so that the DA could establish drying facilities, which farmers could use for free provided they sell their produce to the NFA,” Piñol explained.
He also said that should farmers want to avail themselves of DA’s flagship loan program, the department will offer incentives and prioritize those who will sell their produce to the NFA.
“The DA will also provide an additional incentive of farm machinery grant like tractors and harvesters to farmers groups who will be able to deliver to the NFA a certain volume of their palay produce,” Piñol said.
The NFA is having a hard time buying locally as the grain agency could not match the buying price offered by private traders.
The agency buys palay at P17 per kilogram while traders buy at a high of P22 per kilogram.
This year, NFA is allocating P5.1 billion for its palay-buying program nationwide to boost buffer stock and rice distribution requirements as it targets to buy six million bags of palay, double the three million procurement target last year.
Incentives are also being offered to individual farmers and farmer cooperatives nationwide, including delivery incentive of P0.20 to P0.50 per kilogram, P0.20 per kg drying incentive, and P0.30/kg Cooperative Development Incentive Fee.
A farmer who wishes to sell produce to the NFA only needs to secure a passbook to prove that he is a legitimate farmer, submit an information sheet, and secure a certification from a municipal agriculturist where the farm is located.
For farmers’ organizations, a master passbook must be secured by submitting their certificate of registration, assembly resolution, and master list of members.
NFA starts buying during the summer harvest season, but bulk of the target volume is expected to be bought starting October until December as the main harvest season contributes 70 percent to the country’s total annual harvest.
NFA’s P172-B debt
Meanwhile, Senate President Pro Tempore Ralph Recto called on the government to make sure its efforts to satisfy the rice needs of 106.5 million Filipinos will not further bloat the P172-billion liabilities of the NFA.
“Imports should pay duties, and should have an arrival time that will not compete with local palay harvest, and must not dampen palay gate prices,” he said.
Recto noted that a large chunk of NFA’s debt could have been used to boost local production instead of subsidizing foreign rice growers because of importations.
“The debt needle of the NFA should not move upward,” he added. “We should resist any notion, especially the one couched in populist terms, that we use borrowed money in buying rice from abroad.”
The audited financial report of the NFA for 2016 shows an agency deep in the red.
Recto said the NFA had non-current domestic loans of P82.1 billion and P2.2 billion in interests payable, and P13.9 billion in maturing debts. For its notes payable in 2016, P21 billion was owed to the Development Bank of the Philippines, and P15 billion to the Land Bank of the Philippines.
Recto said “rice security” can be achieved in the long run by boosting production, “by investing in irrigation and in cutting postharvest losses, which wastes 17 percent of palay harvest.”
“If, for example, we have P5 billion, we can use it to buy palay or increase by 40 times the government’s current budget for postharvest facilities,” he added.
He pointed out that 2.5 million metric tons of rice a year are spoiled due to lack of or poor postharvest facilities. The wasted rice is enough to meet the annual rice needs of 14 million people, or more than the population of Metro Manila. – With Paolo Romero