The National Food Authority Council (NFAC) is asking Congress to fast-track the amendment of the National Food Authority (NFA) charter to remove its trading functions in light of the impending expiration of the quantitative restriction (QR) on rice.
Cabinet Secretary Leoncio B. Evasco Jr., who sits as the NFAC’s chairman, said the food agency should get out of importing rice and to just carry out its regulatory functions. “Actually, the NFA should stop its commercial functions and just focus on being a regulatory agency. The NFA is corruption-prone because of the conflict of interest for having both proprietary and regulatory functions,” Evasco said in a statement.
“The Legislature should act fast to amend the NFA charter and finally end the NFA’s monopoly on rice importation and streamline its functions,” he added.
Evasco made the pronouncement after the NFAC said on Tuesday the government will import the staple and has allowed the private sector to bring in imported rice via the minimum access volume (MAV) of the World Trade Organization this year.
He noted the private sector will no longer be able to import MAV rice next year once Manila’s waiver on the special treatment on rice expires on June 30.
The Philippine waiver on the special treatment on rice, which was approved by the WTO Council for Trade in Goods, has allowed Manila to implement the QR until this year. Upon the expiration of the waiver, the Philippines should convert its rice QR into a tariff-rate equivalent, allowing the free entry of imports into the country.
However, Congress must first amend Republic Act (RA) 8178, or the Agricultural Tariffication Act, which imposed the nontariff barrier following the country’s accession to the WTO in 1995. The imposition of rice QR under RA 8178 is not time-bound, thus allowing the nontariff barrier to remain in place even after the waiver expires.
“The NFAC believes that we should let the private sector do the importation of rice instead of NFA. They know the market forces way better than the NFA,” Evasco said.
“Under the law, 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 added.
The Cabinet secretary also said the NFAC has directed the NFA management to amend the guidelines for the 2017 MAV importation and require participating traders to allocate 25 percent to 30 percent of their quota for 25-percent brokens rice.
He said tweaking the guidelines would ensure rice would remain accessible to poor families.
“Private importers in practice usually import 5-percent to 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 percent to 30 percent of their quota for 25-percent brokens of rice,” Evasco said.
“This move will guarantee availability of affordable rice in the local market. This policy shift is also more consistent with President Duterte’s pro-poor policy,” he added. Despite the decline in the NFA’s rice stockpile, Evasco made an assurance that the country’s rice supply remains adequate and that there is no shortage yet.
“There is actually no shortage yet. But the lean months is fast approaching, hence, we need to prepare. Importation of rice is all about timing,” he said. “Let us not speculate on having a shortage. An alarmist stance will only trigger the world market price to go up.”
To further beef up the country’s rice supply, Evasco said he has ordered the NFA to allow the entry of the remaining volume of rice approved under the MAV scheme for 2016. “The council has ordered the NFA management to sign the remaining import permits covering 54,000 metric tons [MT] from the 2016 MAV that are already in our domestic ports, and publish the extension until June for the remaining 20,000 MT to augment our stocks,” he said.
Last year the NFA allowed 210 farmers’ organizations and private firms to import 692,340 MT of rice, lower than the country’s annual MAV of 802,500 MT. Rice imported within and outside MAV are slapped a tariff of 35 percent and 50 percent, respectively.