Palace keeps hands off rice import plan

The government will maintain its hands-off policy on rice importation to encourage farmers’ organizations (FOs) to eventually take over this function completely from the National Food Authority (NFA).

This despite criticisms the Arroyo administration is making another blunder by turning farmers into rice traders instead of focusing on creating policies that will make the country self-sufficient in rice while ensuring that local price production is profitable.

"The President had been very clear. She wants the private sector to be the importers and government has no business aiding for somebody else’s rice because if we do, we are basically paying for international farmers, not our own," said Agriculture Secretary Luis Lorenzo Jr.

For years, the NFA has been coughing up billions of pesos to import not less than 500,000 metric tons (MT) of rice from traditional suppliers like India, Vietnam, Thailand and China because domestic production can’t keep up with the growing rice consumption now stands at 26,500 MT daily.

But a widening budget deficit, Lorenzo pointed out the government prefers to use its dwindling financial resources to buy at least 10 percent of the rice output in critical regions and prop up palay prices if these drop below P9 per kilo, than use limited funds to support foreign grains producers.

This year, the country will import at least 800,000 MT of rice, with half of it to be bought by FOs and rice-based cooperatives. In the next few years, government is hoping that this function will be transferred entirely to FOs.

"We have started the process and I am confident that local farmers can cope with the policy shift," said Lorenzo.

To make the transition from producers to traders smoother, the NFA has given in to FO’s clamor to revise its Farmers as Importers Program (FAI).