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THE
Department of Agriculture (DA) will study the
possibility of increasing the retail price of cheap rice
sold by its attached agency, the National Food Authority
(NFA), at P18.25 per kilogram.
NFA
administrator Jessup Navarro said the agency is now
undertaking a review of the price structure for cheap
rice sold by the government.
“We are
now studying it. We cannot keep the price too low,” said
Navarro at the sidelines of a press briefing on the
current rice situation in the Philippines.
Also,
the NFA had announced that it will increase its buying
price for palay to P17 per kilogram from P12 approved
just a few months ago.
The move
was undertaken to enable the government to keep up with
private traders who have increased their buying price to
as much as P19 per kilo.
The
NFA’s mandate of buying high and selling low has turned
the agency into one of the biggest contributors to the
government’s consolidated public sector debt (CPSD).
Government data show the NFA’s outstanding loans—
incurred from commercial banks to pay for the tariffs of
the rice it imports every year—has already reached P48
billion.
Meanwhile, Agriculture Secretary Arthur C.
Yap said the government cannot drastically reduce the subsidy it
extends to rice as such would have an adverse impact on
the poor.
The
price subsidy is one of the State mechanisms to ensure
that rice would remain affordable to poor families.
In a
related development, NFA rice traders and retailers in
Metro Manila have decided to call off their plan to hold
a “Rice Holiday” but warned that the crisis brought
about by the reported supply shortage that triggered
increases in the price of the basic staple will continue
to be felt.
Ben
Ariola, secretary-general of the Bukluran ng Mga
Nagtitinda ng Binhi (Binhi) sa NCR, said they decided to
call off the “Rice Holiday” after they were assured at a
meeting with the NFA early this week that their
accreditation or license to sell NFA rice will not be
cancelled.
The
5,000-strong Binhi last week threatened to go on strike
following reports that the NFA is planning to cancel the
accreditation of NFA traders and rice retailers for
alleged hoarding. The “Rice Holiday” which was supposed
to be held this week is expected to raise tension, as
demand for NFA rice increases while consumers are going
into panic on fear that there will be no more rice left
for them to buy in the next few months.
Ariola
said that even so, the crisis will continue to be felt
unless the government exercises political will in
solving the problem.
Ariola,
a member of the Camanava Grains Retailers Association,
said the “artificial” rice crisis was caused by a number
of factors, among them poor farm production, price
manipulation by members of the rice cartel, consumers’
panic buying of the relatively cheaper NFA rice and the
government’s failure to act on the problem with
dispatch.
He said
there is adequate supply of rice as far as regular and
well-milled commercial rice is concerned, but because of
its high price, consumers tend to buy NFA rice.
“As far
as NFA rice is concerned, there’s definitely supply
shortage,” he said. According to Ariola, sales of NFA
rice in his store in Acacia, Malabon, went up since the
price of commercial rice increased from P20 to P22 a
kilo to P30 to P32 a kilo three weeks ago.
He said
his stores used to sell only around two sacks of NFA
rice before the price of commercial rice went up. Now,
he said supply is getting scarce.
“Before,
no one was buying NFA rice. But because the price of
commercial rice has gone up, they are going after the
NFA rice.”
A kilo
of well-milled rice now costs around P30 to P40,
depending on the variety, while NFA rice costs only
P18.25 a kilo. He said rice retailers are forced to
increase the price of rice per kilo because rice traders
have also increased the price of rice from P1,000 to
P1,200 per sack to P1,520 to P1,550 per sack as of
Tuesday morning.
According to Ariola, consumers are apparently into
panic-buying of NFA rice because they are cheaper
compared with commercial rice.
And,
while the rice-production shortfall is partly to be
blamed, he said the rice cartels’ illegal activities, as
well as the unscrupulous rice traders called the
“mosquito gang,” who buy palay at a much higher price
than the NFA’s buying price of P10 a kilo, aggravate the
situation.
“Naturally, farmers will sell their palay to rice
traders because they buy them at a much higher price,”
he said. Some rice traders, he said, buy palay at P13
to P18 a kilo. To control the price of rice in the
market, he said the “mosquito gang” will keep it at
their warehouse until the time that supply becomes
scarce enough for them to dictate even higher prices.
Ariola
suggested that the government act more decisively in
crushing the rice cartel and enact a law that would put
a price ceiling on the price of commercial rice to
prevent unscrupulous traders from controlling the price
of palay at the expense of the consumers.
He said
the Department of Trade and Industry (DTI) should also
monitor the price of rice in the market, to check
whether consumer rights are being protected, to the
extent of imposing a price ceiling to strike a balance
between the supply and demand for commercial rice and
NFA rice. (with J. Mayuga) |
