Untold stories 

What President Bongbong Marcos could not achieve, Cebu Governor Gwen Garcia has done, selling rice at P20 per kilo. But here’s the catch: The rice was bought from the NFA at P25 and Cebu province subsidized the P5 difference.

The NFA is not allowed to sell rice commercially under the Rice Tariffication Law except when disposing of rice or palay that are approaching their “due date” or expiry period. Chances are the rice offered at the Sugbo Merkadong Barato, if bought from the NFA, was meant for disposal and is not a regular or reliable supply for P20 rice.

Unfortunately, the P20 rice in Cebu is not the first of its kind. Rosendo So of Sinag shared with us the practice of LGUs and politicians of giving away rice to constituents and my DA sources call this practice MR or Maharlika Rice, a political investment on voters. The risk now is if other governors decide to copy Gov. Gwen Garcia and demand that the NFA sell them P25 rice.

The President has been closely monitoring the situation and is trying to find a solution that is “not offensive” to one and all. While the public believe that “the end justifies the means,” those in government, even PBBM, has to consider a solution that does not violate laws or requires a complicated political/economic/financial solution.

Just as important, the solution has to be politically correct and not lay blame on others for the problem inherited by the new administration and does not trigger or challenge the position or legislation authored by a senator or congressional leader.

If the government, the DA or the NFA was to be gung-ho about it for pogi points, buying locally or importing several hundred thousand metric tons of palay and rice will disturb the supply chain and create inflationary prices in the “market.”

When the NFA moved to be more “competitive” by buying palay at P2 more, traders reacted by buying higher than the NFA. That situation resulted in the NFA not being able to buy enough for emergency or buffer stocks and left the supply of palay and ultimately rice prices in the control of traders and retailers.

If the President used strong-arm tactics, as some congressmen have suggested, by way of raiding rice mills and warehouses, that will result in zero importation, empty warehouses, depleted supplies and no buffer stocks. Why?

When traders buy palay they have to buy in volume. They have to fill their 5-, 10-, 20-thousand metric ton warehouses. Only the private sector traders are allowed by the RTL to import rice, and they usually import 5,000 metric tons per shipment equivalent to 100,000 bags of rice. Much of these stocks are contracted or committed to regular customers.

What’s to stop publicity seeking politicians, law enforcers and media from “raiding” a warehouse, scandalizing the establishment and owners and padlocking the warehouses until documents are submitted? This has happened once too often in various industries and the scandal and lost opportunity is too much.

There is now a growing number of rice traders that have opted to lay low. The global and local uncertainties in the rice industry in terms of food security and increased prices, and the threat of being “inspected” or “raided,” have all but discouraged traders from stocking up. If the private sector won’t import, and the NFA can’t, then it is safe to assume that we won’t have a lot of rice in the country.

In relation to that, another untold story is that there have been almost violent arguments between government officials concerning the actual state of palay and rice stocks.

On one side there are the long-term bureaucrats at the Department of Agriculture who have relied on traditional sources of data, historical observations and statistics collected from unverified, delayed and poorly updated reports. On the other side are farm practitioners, agricultural engineers as well as business owners engaged in the trading of rice and corn who use computers and drone technology.

The older bureaucrats anchor their confidence in a stable supply of palay and rice based on the traditional two to three annual harvests, multiplied by the historical land area or hectares planted to rice plus the usual importations that are done to augment any shortages. The introduction of the RTL or Rice Tariffication Law further added to their confidence, presuming that there would be a flood of rice as traders and importers would fill the void that occurred when RTL took away the authority of the NFA to buy or import rice as needed.

As confident as the older bureaucrats were, their “data” have not accurately studied the effects of climate change, global conflict resulting in inflationary effects on the price of fertilizers, seeds, transport, urbanization and land conversion. To quote a commercial farmer, “My budget for fertilizer used to fill a truck. Now I only need a pick-up because that’s all I can buy.”

Now we have traders from Isabela going down to Pangasinan and Nueva Ecija to buy rice in order to fill their half-empty warehouses. A big chain of malls in the GenSan area has openly said they can’t fill orders for rice.

Finally, another untold story has to do the Board of Directors of the FTI. By the end of December, all members of the FTI Board of Directors will be overstaying by one year and a half. The practice is that these political appointees are coterminous with the previous administration and should have submitted their resignations. But instead, some cite a law that they must remain until new appointees have been named.

Perhaps the Executive Secretary could act on the long pending appointments of new nominees or else all hope of cleaning up and modernizing the FTI will take forever and ever.