Rice importation

MANILA, Philippines - We wish to clarify some points raised on the National Food Authority by Mr. Alex Magno in his column First Person entitled “Deregulated” published in The Philippine STAR last April 28, 2009.

As you know, the NFA is primarily tasked with maintaining sufficient rice buffer stock for the country’s food security. But while the country still works its best to attain rice self-sufficiency, the NFA has to augment local palay procurement with rice importation. As of now, the Philippines has already attained 90 percent sufficiency in rice, therefore it still need to source the 10 percent balance of its requirement from other countries.

May we emphasize, however, that in all its rice importations, the NFA strictly adheres to the provisions of R.A. 9184 or the Government Procurement Act to ensure transparency in the rice import process. But it appears that the required publication of the volume requirement and price offered contributed to the rice price spiral in the world market last year, and not the NFA itself. So as not to disrupt the price in the world market, the government, in its later importations, resorted to government-to-government (G-to-G) negotiations in sourcing additional food security stocks.

The G-to-G importations for 2009, to be aboveboard, was done by the Cabinet Rice Procurement Committee with the Secretary of the Department of Trade as chairman and the Secretaries of the Department of Agriculture and Finance as members. The purchase was also conducted in the presence of representatives from the Procurement Transparency Board composed of members from the Catholic Bishops Conference of the Philippines (CBCP) the Bishops Businessmen Conference (BBC) the National Movement for Free Election (NAMFREL) and other representatives from the civil society.

May we also cite that in all its rice importations, the NFA was required to pay taxes. From 2002 up to 2006, the agency paid almost P 20 billion in rice import taxes.

We can say that part of the so called “losses” the NFA is incurring is being ploughed back to the government in terms of taxes paid. Instead of calling them “losses,” we believe that it should be rightfully acknowledged as social costs that definitely require subsidy.

It is also worth noting that rice importation is no longer a monopoly of the NFA. President Gloria Macapagal Arroyo in her State of the Nation Address (SONA) in 2003, has allowed the private sector including farmers to import rice. Under the Farmers as Importer (FAI) program, Farmer organizations were allowed to participate in rice importation to fill the gap in the country’s requirement. However, there had been unfortunate incidents in the past where, for fear of not getting their projected profit, prospective importers pull out from their commitments to import the allocated volume as the price of rice in the world market increase. The burden to import the allocated volume therefore fell on NFA but at a much higher cost. Only this month, private importers have signified their intention to participate in the Private Sector Financed importation for the initial volume of 200,000 metric tons of rice.

Thank you very much and we hope we have clarified the issue. — REX C. ESTOPEREZ, Director, Public Affairs, National Food Authority