The National Food Authority has shelved plans to import about 330,000 metric tons of rice meant for buffer stocking during the lean months, which drew an uproar from local farmers and agricultural groups.
Agriculture Undersecretary Mercedita Sombilla said Monday the NFA was urged by the national government to stockpile rice from local sources in response to what President Ferdinand Marcos Jr., as concurrent Agriculture Secretary, had advised earlier.
The President himself reported the rice inventory seemed to have stabilized in the recent months without reports of shortage and incidence of predatory pricing.
Sombilla said the NFA and the Department of Agriculture have agreed to collaborate on sourcing the needed inventory from local farmers to do away with importation.
Sombilla admitted the NFA’s inventory was on the low side and it needed to restock as soon as possible and increase the volume of rice in its possession to ensure stability of supply especially during the rainy months.
But farmers are more inclined to sell to traders even at a very low buying price of P13.50 per kilogram of paddy rice compared to NFA’s higher buying price of P19/kg.
Farmers complained of very strict buying conditions from the NFA, which requires a very low moisture content of 14 percent, while traders buy palay from farmers even at 16 to 18 percent moisture content.
The NFA pushing for rice importation “is a great disservice to farmers and Filipinos,” Kilusang Magbubukid ng Pilipinas (KMP) spokesperson Rafael Mariano said last week.
The KMP also said the increasing rice prices in retail markets are a persistent result of price manipulation by the rice cartel.
The agricultural alliance Samahang Industriya ng Agrikultura (SINAG) also opposed the NFA proposal, saying it could buy cheaper rice from local farmers.
Based on the rice supply outlook for 2023, the country’s estimated supply of 16.98 million MT is sufficient to cover the demand of 15.29 million MT.
The DA said this would leave the country with an ending balance of 1.69 MMT, which is equivalent to 45 days of buffer stock, instead of the 90-day ideal buffer stock to stabilize the price of rice.
Given the NFA’s budgetary constraints, the agency expects its buffer stocks will decrease to less than 500,000 sacks by July 2023, equivalent to less than a day of public consumption.
As of April 6, 2023, the Bureau of Plant Industry had issued 989 Sanitary and Phytosanitary Import Clearance for 3.17 million MT volume of rice. Of this volume, 790,449 MT of imported rice has arrived.
Meanwhile, the Federation of Free Farmers urged Congress to immediately reassess and amend the Rice Tariffication Law of 2019 amid the current spike in rice prices, which the group said could lead to a rice crisis later this year.
RTL or Republic Act 11203 removed government controls over rice imports and fully liberalized the rice trade.
“Clearly, the proponents of RTL did not anticipate a situation like now, where both imports and local production are low, and government is estopped from importing rice. We must also introduce additional safeguards to protect our farmers in the reverse situation, where farm gate prices are very depressed due to excessive imports.”, the FFF said.
The FFF traced the current crisis to a huge drop in palay production in 2022 mainly due to high fertilizer prices, which discouraged farmers from planting.
Based on official data from the Philippine Statistics Authority and import volumes recorded by the Bureau of Customs, the FFF estimated palay output in 2022 at only 16.4 million.
“This is 3.57 million tons or almost 18 percent lower than the harvest volume in 2021. Hence, despite the record-high importation of over 3.84 million tons of rice in 2022, the carryover rice stock going into 2023 amounted to only 1.765 million tons,” the group said.
This is good for only 48 days, as against the usual average of 80 to 100 days. The decline in carryover stocks has coincided with the increase in international prices of rice.
As a result, imports during the first quarter of 2023 amounted to just 790,000 metric tons, compared to 927,000 tons in 2022.
Based on the FFF’s projections, an additional 1.2 million tons of imported rice may be needed to attain a 60-day national stock level before the onset of the July-September lean months.
The FFF noted the planned government importation of 330,000 metric tons, if it will be allowed, will not suffice to fill up the supply gap in case the private sector decides to scale down their imports.
“Ironically, the plan to import rice may resurrect concerns about government interference in the rice trade, especially if NFA undersells private traders in the market or government imposes price controls. This will further discourage traders from importing rice,” FFF said.
