NFA to focus solely on buffer stocking under Rice Tariffication Law

There will be intermittent supplies of rice from the National Food Authority (NFA) starting March, with an influx of cheap commercial rice expected due to the passage of the Rice Tariffication Law, the National Economic and Development Authority (NEDA) said Thursday.

According to NEDA Assistant Secretary Mercedita Sombilla, the NFA mandate will be reduced solely to ensure the sufficient supply of buffer stocks of rice in the Philippines.

Under its current mandate, NFA regulates the rice sector, and is the only agency allowed to import rice shipments into the country. However, this will be changed by the Rice Tariffication Law.

Starting March 5, the NFA will only be mandated to ensure that the Philippines has enough buffer stocks—30 days worth of the country's total consumption during the lean season, and 15 days otherwise.

"Until December 2019, NFA buffer stocks will continue to have the 15- to 30-day inventory stock and all other existing guidelines will be followed," said Sombilla.

"What's going to be removed immediately would be the regulatory function—licensing and provision of import permits to traders," she explained.

Under the new law, the buffer stocks will be released in areas which would be affected by disasters and calamities. Otherwise, the supplies will be stored by the NFA until such time that they will be qualified to be auctioned off.

"They are going to be replenished. You cannot keep that buffer stock for a long time," said Sombilla, noting that this will be the time when the supplies would be auctioned off.

The auctioned rice, already marketed as commercial rice, will then be released to the market, which will most likely be priced at P27 per kilogram.

"There will still be the P27 [per kilogram rice] in the market, but we can probably expect much lower price with cheaper imports coming in," said Sombilla.

"Certainly, the P27 will continue to be there because of NFA's buffer stocking and its continuous unloading of its stocks. It can probably even go cheaper once we stabilize the market," she added.

The Rice Tariffication Law also allows the unlimited importation of rice as long as private sector traders secure a phytosanitary permit from the Bureau of Plant Industry and pay the 35-percent tariff for shipments from neighbors in Southeast Asia.

The law earmarks P10 billion for the Rice Competitiveness Enhancement Fund (RCEF), of which P5 billion will be allotted to farm mechanization and P3 billion to seedlings. The fund intends to ensure that rice imports won’t drown out the agriculture sector and rob farmers of their livelihood.

In the same press conference, Socioeconomic Planning Secretary Ernesto Pernia said the additional funds are expected to drive the growth of the agriculture sector moving forward.

"To the extent that the additional P5 billion will be used proactively or immediately by the farmers and it can be dispersed so quickly with the new 2019 budget, then it can have an impact with the lag, perhaps in the third or fourth quarter of the year," he said.

Pernia earlier blamed the weak performance of the agriculture sector in 2018 as one of the factors why the Philippines fell behind its economic growth target of 6.5 to 6.9 percent in 2018. — BM, GMA News