The Market Monitor Minding the Nation's Business
By Rose de la Cruz
President Marcos is certifying as urgent a bill that would amend the Rice Tariffication Law – which is due for review this year – and the charter of the National Food Authority to return the government’s influence in the local rice market, esp. when prices go berserk
Five years ago, Congress passed the Rice Tariffication Law – which stripped the National Food Authority of its marketing powers and entrusting it entirely to the private sector and to focus on buffer stocking only for emergencies like calamities and other man-made disasters.
Legislators were all too willing to yield to the dictations of the International Monetary Fund, World Bank and the Asian Development Bank in exchange for what they perceived would be the all-out support the country would get for funds it would need for development purposes, which unfortunately came in trickles and with so much conditions attach to every loan.
Such acquiescence to the dictates of multilateral funds led to the stagnation of the rice sector– as farmers had no other market but the private traders to sell their products to, which often were also the very same source of loans needed in planting palay and producing rice for the local market.
In exchange for giving the private sector sole grasp of the market, including importing stocks that are necessary to fill local requirement, the P10 billion a year import revenue collections would be used supposedly to modernize the agriculture sector through seeds, inputs and farm tools and other ayuda for the sector during such calamities.
Hence we had the Rice Competitiveness Enhancement Fund entrusted to several subsidiaries of the Department of Agriculture and for calamities like the current El Nino, the unconditional grant program called Rice Farmers Financial Assistance and another conditional support to encourage irice farmers hit by calamities like El Nino to diversify to other high value crops.
During the implementation of RCEF programs under RTL, the government saw the weakness of divesting NFA of its right to import rice (when necessary) not just for buffer stocking for calamities but also to impact local rice trading through its studied intervention in the local market, especially when retail prices go haywire because of price and supply manipulation by local traders, as what is happening now.
Seeing the harsh realities that RTL and the subsequent RCEF programs had on the farming sector, the government is now considering changes to the RTL to ensure that the function of NFA would be returned to serve as a buffer and safety net for farmers, from hereon.
As the Manila Bulletin said President Marcos Jr. will certify as urgent legislations to amend the NFA charter and give it back its marketing function (including importing the grain on a G to G or government- to- government arrangement) to ensure that trade malpractices like hoarding and price-supply manipulation would be stopped. Such amendments would also be introduced in the RTL. The President said he believes the NFA should have some form of influence on the rice market, and rightly so as consumers and rice farmers are at the mercy of rice traders and millers.
Marcos agreed with critics of RTL and RCEF that the local market has not benefited from the promised declining cost of rice but increased the number of cheaper imported rice, to the disadvantage of local palay farmers.
In an interview in Pasay City today, the President said amending the NFA charter and RTL would give the government a say when retail prices of rice go up. “I think it justifies the urgent certification,” he said.
He said the price of rice is increasing because the government has no control over it.
“The problem why the price of rice is increasing is because traders are competing. They want to buy rice at a higher price and we have no control over that,” he added.
Signed by former president Rodrigo Duterte in 2019, the RTL lifted quantitative restrictions on rice and introduced tariffs to protect local rice producers.
Last April 30, Rep. Mark Enverga (Quezon, 1st district), chair of the Committee on Agriculture and Food, began evaluating the RTL’s effectiveness on rice. He cited the need to revisit the RTL before its mandatory review this year..
“The clamor to revisit the law is overwhelming… We are considering the proposals to look into the gaps, the challenges, and the need to further enhance the effectiveness of the law,” he said.
“We cannot deny the fact that the law has accorded millions of rice farmers the much-needed assistance. However, the law is always challenged when it comes to rice supply and rice prices,” he added.
Speaker Martin Romualdez had said that the House will pass a bill amending RTL to allow the NFA to buy and sell rice at lower prices.
DA Assistant Secretary and spokesman Arnel de Mesa said in a radio interview that their data showed that regular milled rice now costs P51 to P54 per kg, and P48 to P55 per kg for well-milled rice.
The price of imported regular milled is P48 to P51 per kg.