In view of the approval by the National Food Authority council of a government to private (G2P) scheme importation of rice, the Council on Wednesday has ordered the NFA management to allow the entry of the remaining volume of rice under an earlier private sector-led importation to ensure enough buffer stocks ahead of the lean season.
“The Council believes that we should let the private sector do the importation of rice instead of NFA. They know the market forces way better than NFA,” said NFA Council Chair Leoncio Evasco in a statement.
Under the law, Evasco said, the NFA is mandated to insure adequacy of supply and stability of commercial prices at levels within the reach of low income families.
“The NFA therefore is not required to directly participate in the market,” he noted.
As such, the Council has ordered the NFA management to sign the remaining import permits covering 54,000 metric tons (MT) from the 2016 minimum access volume (MAV) that are already in domestic ports, and publish the extension until June for the remaining 20,000 MT to augment the industry stocks.
The NFA Council also directed the NFA management to amend the MAV Guidelines to require participating traders to import 25 percent brokens rice from their 25-30 percent quota. This will insure adequacy of supply and stability of consumer prices at levels within the reach of low-income families.
“Private importers in practice usually import 5-15 percent brokens rice or the so-called premium rice which goes to commercial stocks. However, this time, the Council will require private importers to allocate around 25-30 percent of their quota to import 25 percent brokens of rice. This move is to guarantee availability of affordable rice in the local market. This policy shift is also more consistent with (President Rodrigo) Duterte’s pro poor policy,” said Evasco.
“The NFA should stop its commercial functions and just focus on being a regulatory agency. NFA is corrupt prone because of the conflict of interest for having both proprietary and regulatory functions. The legislature should act fast to amend the NFA charter and AFTA law to finally end the monopoly on rice importation of NFA and perhaps streamline its functions,” he said.
The NFA Council has earlier approved the importation of 805,000 MT MAV of rice this year.
MAV refers to the volume of commodities that is allowed to be imported by a member country, as a commitment to the World Trade Organization (WTO). The 2017 MAV is the last of its kind before the lifting of the quantitative restriction on rice by June 30, 2017.
Meanwhile, Evasco allayed fears of an impending rice shortage following the announcement of several importation schemes ahead of the lean months (July to September).
“There is actually no (rice) shortage. But the lean months is fast approaching hence we need to prepare,” he said.
“Importation of rice is all about timing. Let us not speculate on having a shortage. An alarmist stance will only trigger the world market price to spike up,” he noted. (Lilybeth G. Ison/PNA