Crisis call eyes price deflation

After implementing various measures that failed to lower rice prices, the Department of Agriculture (DA) announced it is preparing to roll out its ultimate solution — the declaration of a national food emergency for rice as early as Wednesday this week.

The DA allayed fears of a supply shortage despite the move which is tantamount to an admission of a crisis in the grains sector.

“We would like to reiterate: there is no shortage in the supply of rice in the country,” DA Assistant Secretary Arnel de Mesa stressed in a forum yesterday.

Republic Act 12078, which amended the Rice Tariffication Law, allows two grounds for the DA Secretary to declare a food security emergency, which are a supply shortage and an extraordinary increase in prices.

“The first basis, lack of supply, does not exist because we have a lot of supply. So, the only reason (for the declaration) is the extraordinary increase in prices,” De Mesa pointed out.

“We know that many initiatives have been taken by the government, the DA and the DTI (Department of Trade and Industry) to lower the price,” he said.

“The steps taken by the government to induce lower prices included the imposition of EO (Executive Order) 62 reducing the import tariff from 35 percent to 15 percent. There is also the Kadiwa program. Despite all this, rice prices remain elevated although we feel a decrease, but not to the level that we are expecting,” he said.

De Mesa said the DA is expected to receive the National Price Coordinating Council’s (NPCC) resolution by Monday, 20 January, urging a national food emergency.

“It is expected that it will be reviewed from Monday to Tuesday and by Wednesday, the Secretary will take action, most likely, the declaration of a food security emergency,” De Mesa said.

Decongestion of NFA silos

According to Agriculture Secretary Francisco Tiu Laurel Jr., the declaration of a food security emergency is needed to soften the inflated rice prices and to decongest the warehouses of the National Food Authority (NFA) to free them for new stocks as the harvest season approaches.

President Ferdinand Marcos Jr. endorsed the proposal, stressing that the price of rice must be “forced down” to ensure that the market is working properly.

The government has resorted to multiple interventions such as reducing the tariff on imported rice but grain prices have remained high.

The DA clarified that there is no rice shortage but the emergency call is needed for the buffer rice stocks to move.

Around 300,000 tons of rice need to be moved to give way to the upcoming harvest season, according to Laurel.

Local government units as well as other government agencies have agreed to purchase the NFA rice that they can sell.

Buffer stocks stabilize prices

Trade and Industry Secretary Ma. Cristina Roque, who heads the NPCC, said the move would allow the National Food Authority to release its rice buffer stocks to stabilize prices while replacing the stocks with locally produced rice to support Filipino farmers.

Regarding the looming DA declaration, Roque said the DTI will wait for the announcement of the DA.

“The DTI will monitor and enforce the prices that will be set by the DA,” Roque said.

She said this would empower DTI to take decisive action and protect the consumer welfare while strengthening the country’s agricultural backbone.

The DA will continue its programs that offer affordable rice such as “Rice for All” that sells rice mixed with broken grains at P38 per kilo.

De Mesa said the agency is expected to expand Rice for All to other provinces by February or March.

“We will start with the urban areas outside of Metro Manila like Cebu, Davao, Cagayan de Oro and Iloilo,” he said.