NFA urged to sell rice at lower prices


Robert Ja Basilio Jr.


31 July 2010


A Philippine agency that sells rice at lower than market rates was urged to cut prices further, making the staple more affordable, especially for the farmers themselves.

Instead of an estimated P25 a kilo, the National Food Authority (NFA) should sell the staple at P18 a kilo, the Rice Watch and Action Network (R1) said in a briefing on Friday.

The move is expected to push down market prices and help poor farmers buy cheap rice for their own consumption, the groups said in a statement.

Besides R1, among those who made this appeal include groups such as the Pambansang Koalisyon ng mga Kababaihan sa Kanayunan (PKKK), the National Rice Farmers Council (NRFC), and the Alyansa ng mga Magbubukid sa Agrikultura (AMA).

However, the proposal “will lead to additional losses," NFA director Rex Estoperez told GMANews.TV in a phone interview.

Created five days after martial law was declared in 1972, the NFA provides a rice price subsidy to the poor by buying the staple at P29 to P30 a kilo — the current commercial rice rates — and selling the grain at P23.50 a kilo.

An estimated 130,000 bags of rice are put up for sale daily, Estoperez explained. With each bag containing 50 kilos, its losses per day is roughly P39 million.

The NFA “will not have a problem with the proposal if the President and the Department of Finance (DOF) approves [the farmers’ proposal]," Estoperez added.

The agency’s subsidy has resulted in its incurring a P171 billion deficit, as of end-2009, contributing further to the national government’s budget shortfall of P293 billion for the same period.

Dispose of two months’ stocks, NFA urged

To further cut grain prices, the NFA was also asked to release two months’ worth of rice stocks after it said inventories were good for 99 days, well above its mandate of storing a month’s worth of supplies.

Increased rice supplies in the market will allow the NFA to “sell rice at the lowest price of P18 to further push prices down," the groups said in a statement.

Selling two months’ worth of rice stocks would also free up space in the NFA’s warehouses across the country, preparing these facilities for the main harvest season in October, NFRC president Ka Jimmy Tadeo said during the briefing.

This would allow the agency to buy more of the staple from local farmers, instead of simply importing it from other countries such as Vietnam and Thailand, Tadeo added.

In a separate interview with GMA News aired over “24 Oras," the farmers' group led by Tadeo on Friday also stressed that the NFA must dispose of the sacks of rice stocked in its warehouses before they start rotting and be unfit for human consumption.

The groups said the stocked rice is now showing signs of deterioration as it slowly discolors before finally becoming pulverized.


World's largest rice importer

The Philippines, the world’s largest rice importer, is expected to harvest some five million metric tons of rice in October, the second harvesting season after the first in April.

The NFA maintains 780 warehouses which can store up to 21 million bags of rice, according to Estoperez.

The government has already imported 2.45 million metric tons (MTs) of rice in the beginning of the year, the groups said in a statement.

For its part, the NFA explained that it has always buying rice from local farmers.

“Even without telling us to do so, we buy rice locally," Estoperez said.

However, fund releases are sometimes delayed, he said, adding that a total of P20.4 billion has been allotted for its palay procurement program.

In April last year, the NFA hiked local palay procurement by 45 percent to a million metric tons to cut the country’s dependence on imported rice.

In 2008, the agency reported that it bought 685,300 MTs, the largest such procurement in three decades.—JV, GMANews.TV












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