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Amid reported plan to import rice anew from India, group presses NFA abolition

21 August 2023

The Samahang Industriya ng Agrikultura (Sinag) on Monday proposed the abolition of the National Food Authority (NFA) over the agency’s alleged preference to import rice rather than buy from Filipino farmers.

In a statement, Rosendo So, president of Sinag, said that the latest “showcase” of NFA’s “skewed preference” for imported rice was the ongoing negotiations with India for rice procurement.

“They’re not buying from our farmers anymore. They’re buying from Vietnam, India. They’re negotiating on rice. What’s this!,” So said.

The Sinag official also expressed fears that funds for buying local produce might be diverted to the procurement of rice from India.

“The NFA power is to buy palay isn’t it?” So asked. “What are they doing, negotiating with India to buy rice?”

“They might use the money allocated to buy domestically produced palay to acquire imported rice again,” So added, referring to the agency’s P8.5 billion available funds for procurement of rice. 

Also, the NFA’s tack seems to be contrary to the policy of President Ferdinand Marcos Jr. who wants to ramp up domestic production in agriculture.

“For the past administration, the direction was to import,” So said.

“In President Marcos Jr.’s administration, he wants local production, so a lot of Filipino farmers were encouraged to return to farming but then again the NFA’s policy seems contrary to this,” he noted.

If the NFA will not help the country’s grain and farming industry by buying domestically produced rice then the agency should be abolished, he added.

“Since they are running contrary to the President, the NFA is not helping by buying ‘palay,’ then we should just abolish the NFA,” So said.

The Sinag chair also questioned the NFA’s decision to source Philippine rice stocks from abroad when it could buy rice at a much lower rate in the country’s other agricultural regions.

So cited Philippine Statistic Authority (PSA) data showing average buying rates for a kilogram of domestically produced palay was between P18.50 and P19.

The NFA can always look for prices lower than these in other regions, he said.

“Buying rates in other areas are lower, so they should have bought there, right? They should have bought there already,” So said.

“If you are comparing price ranges, especially in Nueva Ecija, prices there are really high. But if you will check on Mindoro and other areas, prices there are lower,” he said.

So also scored the NFA for justifying importation by announcing it only has 46,000 metric tons of rice left in its inventory, which is good for just 1.3 days.

But this is the fault of the NFA, So said, since it has not been buying locally-produced rice to add to its stock.

“That is their fault, why did they not buy more palay in the first place? That is their mandate, which is to buy locally produced palay,” he said.

He recalled the NFA saying at a congressional hearing that it still has P8.5 billion left for rice procurement, which was enough to buy palay at P19 per kilo.

So said the amount of palay that can be bought with P8.5 billion translates into 290,789 metric tons of rice which is more than enough to boost the country’s buffer stock.

The Philippines’ daily consumption rate of rice is 35,000 metric tons.

“The NFA should have sufficient buffer stock if they bought ‘palay’ ahead of time, the problem is they did not buy any,” So said.

Jayson Cainglet, executive director Sinag, for his part, said “we would rather hear it from the President that he wants NFA to import rice.”

“What we heard from the President is that there is no rice shortage and he wants DA to increase local production,” he added.

Cainglet said that some DA officials have long been misquoting the President.

One thing is clear though, there is a push by certain officials of the DA to call (in the guise) for a “review of the RTL” with the single objective of allowing the NFA to import, Cainglet added.

Seek additional budget—PRISM

The Philippine Rice Stakeholders Movement (PRISM) urged the NFA to seek additional budget from Congress to strengthen the country’ rice production capacity rather than pushing for importation of the staple grain.

 “As farm gate cost [currently at P21 to P25 per kilo of palay- fresh palay] are affected by price fluctuations in the market, we urge the NFA, whose current support price of P19 per kilo [clean and dry] is far below the current farm gate price, to seize the ongoing budget season and approach the Congress for higher budget allocation that will benefit local farmers and strengthen the local industry instead of pushing for importation that will drain government funds in favor of foreign suppliers,” PRISM said in a statement issued over the weekend.

The group also said that the NFA should focus on its role as mandated by the Rice Tariffication Law (RTL) RA 11203 to build its buffer stock exclusively from local farmers and rice millers instead of imported sources.

“This move is also more consistent with the President’s objective to support local farmers and strengthen our rice industry,” PRISM said.

“It has reached our attention that the NFA Administrator [Roderico Bioco] was in India to negotiate on behalf of the government,” it added.

“If this is true, we would like to ask for a clarification regarding this matter, which we believe runs counter to the provisions of the RTL which authorizes only the President to negotiate upon the recommendation of Neda [National Economic and Development Authority] and the DA [Department of Agriculture],” PRISM said.

Moreover, the group said that any discussion about importation initiated by the NFA is obviously ultra vires, or beyond its mandated power.

The international rice market situation would reveal problems are beyond the control of local businesses and the government. 

PRISM said Filipino private importers who have booked supplies from Vietnam as early as the first quarter are now faced with the dilemma of Vietnamese importers canceling their contracts in favor of other countries affected by India’s rice export ban.

“We are thus urging that relevant authorities engage in diplomatic discussions with Vietnamese counterparts to find a mutually beneficial resolution and honor the contracts of our importers,” it added.

“Complicating our rice situation, careless statement of a certain DA official has maliciously criticized our members’ effort to subsidize a limited supply of P38 per kilo rice during lean months that was intended for our indigent ‘kababayans’,” the group said.

On July 7, PRISM launched the P38 per kilo Tulong sa Bayan Bigas para sa Mamayan in various areas in Metro Manila, Luzon, Visayas and Mindanao through it rice retail networks, barangay and local government caravans and Kadiwa outlets.

“Since then until this time, we still continue selling the P38 per kilo rice in the respective channels chosen by our stakeholders,” PRISM said.

Recently, President Ferdinand Marcos Jr. has instructed the NFA to focus on the local production of rice to augment the country’s supply.

“The President instructed the agency to continue exploring other ways in prioritizing rice production other than importation, such as contract farming and other means that will guarantee an increase in the NFA’s volume production,” a statement said.

Furthermore, Bioco briefed Marcos about measures that have been carried out to ensure that the country has sufficient supply of rice.

Improved rice output this year

For his part, DA Senior Undersecretary Domingo Panganiban, citing a Philippine Statistics Authority report, said that palay (unhusked rice) output from January to June rose to 9 million metric tons (MMT), from 8.7 MMT produced during the same period in 2022 and in 2021.

He said that the 9 MMT palay is equivalent to 5.9 MMT milled rice (200,000 MT more than the PRISM estimate of 5.7MMT).

PRISM is a monitoring and information system for rice production in the country.

Source: Business Mirror