NFA urged to leave market alone on rice prices

The country’s agriculture secretary has urged the government to hand the reins of determining rice prices to the market.
Arthur Yap stressed that the National Food Authority (NFA) should raise rice prices as dictated by the market, instead of giving subsidies. This, he said, will encourage local farmers to boost production and increase their profitability.
“We should get the NFA to start moving prices up (instead of giving subsidies). Let’s leave the market alone,” Yap said.
The NFA has been selling rice to poor families in the Philippines at P18.25 per kilo, significantly lower than commercial rice prices. According to Yap, rice subsidies “distort the market” by pressuring farmgate prices.
“Our primary mandate at the Department of Agriculture (DA) is to ensure farmgate growth. The poor is with the responsibility of the Department of Social Welfare and Development (DSWD),” he said.
To make up for higher prices of subsidized rice, Yap said the government can provide cash handouts to poor families already identified by the DSWD.
“We are veering away from subsidized rice. Conditional cash transfers is a better option. (The government) should only interfere during extreme conditions and market failures,” he said.
The country’s major rice producing regions were hard-hit by storms “Ondoy” and “Pepeng” (international code names Ketsana and Parma, respectively), causing the government to order imports of 250,000 tons of rice. Still, Yap said they will continue to focus on supporting local crops.
“The government’s focus is on buying local produce. Importation is our last resort,” Yap said.
For his part, University of Asia and the Pacific Dean of the School of Management, Dr. Rolando Dy, said the government should not place too much focus on rice investments.
Dy, who is also the executive director of the Center for Food and Agribusiness, said diversifying food sources will provide more food options for Filipinos, maximize farmlands, sustain the environment, and boost the country’s resources for export development.
“We should diversify food security. Rice uses a lot of water. Let’s develop dryland crops. Think of saba banana, cassava, gabi, squash, and corn. Think of lower carbon footprints if rural communities are food self-sufficient in other carbo sources. Think of agri-diversification that leads to agro-industries and off-farmland nonfarm jobs,” he said.