NFA may export special rice varieties, says DOJ

MANILA, Philippines - A few months after the crisis on the supply of rice hounded the country, the government has allowed the exportation of rice through either local or foreign traders.

In a four-page legal opinion, the Department of Justice (DOJ) said the National Food Authority (NFA) has the authority to allow the exportation of “special” or “fancy” rice varieties by foreign and local entities.

Justice Secretary Raul Gonzalez said Presidential Decree No. 194, which the late strongman Ferdinand Marcos issued on May 17, 1973, “allows an alien, association, partnership or corporation owned whole or in part by foreigners to engage in the rice industry” including activities such as the “production, warehousing, processing, milling, handling the distribution either wholesale or retail of rice.”

The only limitation on the possible stranglehold by foreigners on the supply of local rice, the DOJ cited a provision of the law requiring the transfer of at least 60 percent of such foreign firms to Filipino citizens over a period to be established by the now defunct National Grains Authority.

The NFA, which succeeded the functions of the National Grains Authority, in a resolution passed in 1998 allowed a 30-day transition period before such foreign firms are required to turn over 60 percent to Filipinos.

“The conclusion is inevitable, therefore, that foreign investors may be authorized to cause the exportation of fancy or special rice provided that, after 30 years from start of operation, their ownership shall not exceed a maximum of forty percent of the equity capital.”

The special or fancy rice varieties, according to the opinion rendered upon the request of NFA Administrator Jessup Navarro, include glutinous, aromatic rice and those with “excellent and nutritive quality.”

Navarro sought the legal opinion of the DOJ “in view of foreign investors’ interests to participate in the development and production of rice in the country and to export the same to target markets abroad.”