The Long View

Still at square one

Early last December, the National Food Authority (NFA) assured the public it would have adequate supplies. This was in response to news that rice prices were spiking in the markets. While agriculture officials had crowed there was a bumper crop last year, the NFA’s problem was that farmers enjoyed higher prices from the private sector and so wouldn’t sell to the agency. Furthermore, rice imports were only allowed to the extent that there remains unfilled quotas from 2016. The NFA complained it only had half of a 2016-decreed quota left to work with for imports, which hampered its ability to influence prices—this explained why despite its argument that overall, there was plenty of rice (62 days), the NFA itself only had a very small eight-day buffer stock.

Having a very slim buffer stock at that eight-day level by that time wasn’t something new. Months earlier, in May 2017, it was already being reported at that level. The NFA is meant to maintain a buffer stock of rice to ensure supplies don’t run out. This is what the NFA grandly calls the strategic rice reserve, meant to provide 15 days’ supply most times of the year, with a 30-day reserve for the lean months of July to September.


Practically as soon as it entered office, the present dispensation was divided on the question of rice imports. At the time, the questions were these: Should the government engage in importing rice by entering into government-to-government deals? Should it simply get out of the way, abolish the NFA, and allow the private sector to do the importing? Ought the goal be to guarantee a certain level of income for domestic rice farmers, or focus on keeping rice prices low for all consumers, or somehow, a combination of the two? The question of importation became a question of Cabinet factions, with Secretary to the Cabinet Leoncio Evasco Jr. perceived to support letting the private sector do the importing, and Special Assistant to the President Bong Go favoring the government-to-government importation scheme; with President Duterte intervening to cripple Evasco’s oversight over the NFA, whose head was considered more aligned to Go. Complicating things further was Agriculture Secretary Manny Piñol, an advocate of full rice sufficiency within one to two years, and the President’s easy promises of a sack of rice for every poor family enrolled in the conditional cash transfer program.

In the end, the President lurched from one side of the spectrum to another from 2016 to 2017. In 2016, he fired the official Evasco was relying on, Helman Valdez, sending a signal that he preferred the government-to-government approach of the NFA under Jason Aquino; but he also said, imports should be the instrument of last resort, backing Piñol’s rice farmer-centered approach. He even relented when shown the impracticality of his a-sack-for-every-family scheme. So 2016 ended with the NFA spared from abolition, and a 500,000-metric-ton quota for government-to-government rice import deals. In April 2017, the President decreed there would be no importations; by May 2017, he had been convinced there had to be imports, and approved them. And within the government, factions argued in public over whether to pursue government-to-government rice import deals, or have government mount offers for the private sector to do the importing.


As usual, accusations of favoring cartels and being on the take flew thick and fast between the two factions, but the real question was whether the level of government debt piled up to enable government-to-government imports (to stockpile rice on the basis of forecasts of demand versus supply), combined with the costs of subsidies for rice farmers to guarantee them a certain level of income, are worth it. What does seem consistent is that the NFA was, and remains, in the eye of an inter-Cabinet storm, as it’s been fixated on insisting on at least two things: It claims it can’t buy locally, as Piñol prefers, because the private sector offers more, and it can’t affect the markets because it’s prevented from importing as much as it thinks it should.

The end result is what senators are demanding to be investigated: the creeping up of rice prices, and the continued existence of a failure on the part of the NFA to maintain the buffer stock it’s supposed to have. Whether senators will dare ask the ultimate question — on why can’t the President who said the presidency is about leadership, resolve the debate within his own official family — remains to be seen.

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TAGS: Manuel L. Quezon III, National Food Authority, NFA rice, Rice supply, The Long View
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