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FROM BUSINESS MIRROR: Dar wants NFA to sell rice again to the poor

Author: DA Communications Group | 16 May 2022

Agriculture Secretary William D. Dar on Wednesday floated the idea of reinstating the commercial functions of the National Food Authority (NFA), particularly the sale of rice to the poor.

Dar said the Department of Agriculture (DA) is currently mapping out strategies that will allow the NFA to participate anew in the domestic rice market. The NFA’s market intervention powers were stripped away by the rice trade liberalization (RTL) law which was enacted in 2019.

He said selling rice at P30 per kilogram entails two things: allowing the NFA to sell rice again and quadrupling the food agency’s budget to P30 billion annually.

A higher budget would allow the NFA to beef up its buffer stock and maintain at least 30 days’ worth of daily national consumption, Dar added. At present, NFA’s annual budget is only P7 billion, enough for the procurement of about 5 to 10 days’ worth of rice buffer stock.

This inventory level, Dar said, would allow the food agency to have a substantial market share through its roll-over scheme wherein it buys palay from farmers at a “favorable price” then sells it at below the prevailing market price.

Considering the NFA’s current buying price of P19 per kilogram, the food agency can increase the price of milled rice by P3 per kg to P30 per kg from the previous P27 per kg, prior to the enactment of the RTL law.

“I would like to also mention that the rice that NFA will sell to the market is for the poorest of the poor, not for everyone, so we will really give more support to the poorest of the poor,” he said in a webinar organized by the Economic Journalists Association of the Philippines on Wednesday.

“As for reducing rice prices, this is just my view, we are still working on the map.”

Dar issued the statement after he was asked by reporters on this regarding the campaign promise of Ferdinand Marcos Jr., presumptive winner of the 2022 presidential elections, to bring down the price of rice to P20 to P30 per kg.

The DA chief, however, maintained that Marcos was referring to the buying price of unmilled rice, which is currently at P19 per kg, and not the price of milled rice.

“I surmise that what has been mentioned as P20 per kg is possibly for palay. The farmgate price presently is P19 per kilogram. So I am supporting that idea to make it P20 per kg to increase the income of our farmers,” he said.

Reinstating the commercial functions of NFA would entail the amendment of Republic Act 11203 or the RTL law, which liberalized the rice industry and deregulated the state-run food agency.

Dar also disclosed that the government would urge the local governments of the top 20 rice-producing provinces to buy palay and sell rice to increase the country’s buffer stock. The NFA pegged the country’s daily rice consumption at 33,500 metric tons.

“After these elections, we are having a dialogue with the top 20 rice-producing provinces for them to engage in rice business: procure palay as guided by the farmgate price and roll it over to sell in the market,” he said.

“We are aiming to have additional 30-day buffer stock coming from the engagement from the LGUs.”

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