Peace of mind

During the Paschal Triduum (Holy Thursday, Good Friday and Black Saturday) I met with friends and we accidentally talked about the price of rice as well as rice importation. I think Filipinos in order to have peace of mind should know what the Rice Tariffication Law (RTL) is all about to understand why we are experiencing rice inflation today. Why do we import rice from other countries?

Friends, we have rice inflation not because of Senator Cynthia Villar; she was not solely responsible as others claimed. The Rice Tariffication Act which amended the Agricultural Tariffication Act of 1996 (RA 8178) was properly deliberated on in a series of hearings with the stakeholders and the lawmakers. The amendment of the RTL lasted more than a year and was agreed on by 23 senators during the third reading. The law replaced the system of quantitative restriction (QR) on rice.

So, why do we have rice inflation? Is it because the National Food Authority (NFA) lost its power to buy, sell and import rice? Is it really true that there is a monopoly in the buying and selling of rice?

Yes, indeed, the NFA had lost this power but, following the Senate Committee on Agriculture, Food and Agrarian Reform hearings, you might be surprised to learn of the actual reality on the ground.

First, the NFA-led rice importation had proven ineffective and costly. More than a decade ago, in 2013, poor planning resulted in rice inflation, wherein the price of rice surged above 11 percent.

In 2018, the NFA pushed for government-to-government (G2G) importation to address shortages, but delays and the lack of transparency worsened the problem — over 42,000 metric tons of rice were undelivered thus contributing to further price hikes.

Second, the NFA incurred losses, including rice spoilage, overstocking, and unnecessary storage expenses, due to poor inventory management.

Third, the NFA’s “buy high, sell low” model was flawed. According to publicly available NFA data, it currently has a ballooning debt and losses amounting to over P152 billion, largely due to its strategy of buying rice from local farmers at high procurement prices and selling this to the public at subsidized rates.

Fourth, with the inefficiencies in targeting and distribution, only about 27 percent of poor households benefited from the NFA rice, while nearly 68 percent of recipients were non-poor.

There was a public clamor to abolish the NFA, but Senator Villar did not heed the calls, as she believed its officials and personnel have a vital role to play in food security and sufficiency in our country.

With the reduction in the NFA’s regulatory and enforcement functions in 2019, employees were offered a retirement package and almost half of the workforce availed of it.