It was a problem of prices, not supply

Published April 14, 2018, 12:05 AM

by Mario Casayuran and Vanne Elaine Terrazola


We had a rice crisis of sorts last week but it was not one of supply. It was one of prices.

The National Food Authority (NFA) is the government agency whose job is to ensure an adequate supply of inexpensive rice for the masses. It gets its supply from Thailand and Vietnam, whose farmers can produce rice at much lower costs than Filipino farmers.

Last Wednesday, the NFA — which is supposed to maintain a buffer stock good for 15 days at any given time and up to 30 days during the lean months from July to August –disclosed that its stocks were down to 0.35 days – 200,000 bags. With cheap NFA rice nearly gone from the market, only locally produced rice was available in the market and prices began to rise.

President Duterte stepped into the situation which, it turned out, had resulted from conflicts between officials of the NFA management and the NFA’s policy-making body, the NFA Council. Cabinet Secretary Leoncio Evasco Jr., who is chairman of the NFA Council, assured that while NFA stocks are down in its bodegas, new imports had already arrived and more were coming in May. Besides, he said, the country expects a “big harvest” by local farmers, as reported by Secretary of Agriculture Emmanuel Piñol.

Later in the week, Secretary Piñol said he and NFA Administrator Jason Aquino had reached an agreement that the NFA would get some of its supply from Filipino farmers’ groups, cooperatives, or associations, which the DA would help with production loans and machinery. The DA, through its regional offices, would inform the NFA of areas where farmers’ prices are considerably lower than the market prices set by traders and middlemen.

The crisis is now largely over and the fears raised by the photos of nearly empty NFA bodegas have now died down. There is indeed no problem of supply. Our farmers can produce sufficient harvests for the country, but at prices above the costs of farmers in Thailand and Vietnam,.

This should now be the towering goal of the Department of Agriculture – to bring down production costs. It has already taken big steps to this end – free irrigation, a production loan program at 6 percent a year payable in one year, providing farm machinery like tractors, establishing drying facilities for free use by farmers.

The day this price problem is solved, we no longer need to import rice for the low-cost stocks of the NFA. Our old dream of total self-sufficiency in our staple food, a dream pursued by all administrations from President Marcos’ Masagana 99 program, will finally be realized.