No rice importation yet under P-Noy

This is to respond to the questions posed by Mr. Federico D. Pascual Jr. in his Postscript, January 9, 2011, “Cheaper to import rice than to raise it?”

Yes, it is cheaper to import rice, even at present levels, when prices have increased due to unusually heavy worldwide demand versus reduced supplies. The exception is when NFA purchased in 2008 at as high as $1,200 per metric ton, which translates to $60 per sack or the peso equivalent of almost P60/kilo while selling it at as low as P16.50 per kilo. NFA losses ballooned, and its debts multiplied.

National government and DA policy seeks to achieve self-sufficiency over a focused three-year program of irrigation and other support services to farmers. NFA is supposed to import less corresponding to the incremental rise in local production. At present, we buy less than five percent of farmer produce, but we will increase the same, and maintain such level to at least 10 percent within a three-year timeline. These prescriptions are in the DA/NFA Food Staple Self-Sufficiency Program submitted to Malacañang.

NFA however sells 16 percent of total market (more when there are supply shortfalls) which we will gradually relinquish to the private sector, maintaining only a 30-day buffer stock for strategic food security reserves.

When we took over, we inherited a 70-day inventory level, more than twice the 30-day mandated buffer. We thus refused to give import permits to the private sector even if NFA had earlier authorization to import as much as 700,000 metric tons more. We also asked the Vietnamese government to postpone the shipment of some 52,000 metric tons which at the time of our assumption was yet un-shipped. These stocks, already contracted for by the previous dispensation, will be shipped in 2011 instead.

Are we back in “the merry business of importing rice in huge quantities”, as Mr. Pascual claims?

No. True to our word, we have not imported a single grain since we took over. For 2011, we will import only as much as is reasonably needed to ensure food security, considering that the DA has admitted that there is a shortfall between consumption (demand) and production (local supply). That amount, we estimate, will be far less than the huge volumes imported annually in the last 3 years by the preceding administration.