DOF says NFA must strengthen logistics ops amid rice tariff law

The National Food Authority needs to strengthen its logistics capability to ensure that the government has enough buffer stocks of the staple grain with nationwide reach at all times, the Department of Finance (DOF) said Saturday.

In a statement, Finance Assistant Secretary Antonio Joselito Lambino II said this becomes more imperative after the NFA was stripped off of its function in rice importation as a result of the Rice Tariffication law taking effect last March.

The NFA’s import licensing and other regulatory functions ceased when Republic Act No. 11203 or the Rice Tariffication Act took effect last March 5, although the crucial role of emergency buffer stocking remains with the agency and has been emphasized.

Lambino said the NFA’s task of regulating the rice sector was removed owing to the agency’s "inefficiencies" resulting from a controlled import system, and which left the agency saddled in debt amounting to about P145 billion.

Under the law imposing tariffs on rice imports in lieu of quantitative restrictions, private traders would now be allowed to import rice so long as they comply with basic requirements set by the Department of Agriculture’s Bureau of Plant Industry (BPI) for food safety and protection of farming areas, Lambino said at a recent media forum in Quezon City. 

With the rice tariffication law in place, imports from ASEAN countries will be charged a tariff of 35 percent of its value, while imports from non-ASEAN countries within the minimum access volume (MAV) initially set at 350,000 metric tons (MT) will be taxed 40 percent. A tariff of 180 percent will be collected for imports above the MAV from non-ASEAN countries.

On top of paying tariffs, rice importers will be required to secure sanitary and phytosanitary import clearances (SPSIC) from the BPI, which assumed the food safety regulation function of the NFA under the rice tariffication law. 

This requirement will ensure that rice imports are free from pests and diseases that could affect public health and local farm production, he said. 

Lambino said that aside from lowering rice prices and providing direct assistance to farmers, the law will also be an effective deterrent to smuggling because rice imports would now be liberalized.

"The tariffication law is the most important weapon against smuggling. The incentive to smuggle would almost be nil because anyone can now import rice so long as they comply with the requirements,” Lambino said.

He said that with imports now hewing closer to prices in the global or regional markets, traders would be discouraged from smuggling or even hoarding their stocks.

“Who would be encouraged to hold on to their stocks when there is enough supply in the market and anyone can import if the supply declines?”  he stressed.  

Lambino said that as earlier projected by economic managers, liberalizing rice imports would further lower inflation by 0.5 to 0.7 percentage point this year, ensuring that the rate remains within the Bangko Sentral ng Pilipinas (BSP)'s 2 to 4 percent target for 2019. — MDM, GMA News