NFA to sell rice to gov’t agencies, LGUs at higher price

By Madelaine B. Miraflor

Once the National Food Authority (NFA) runs out of imported stocks in September, it will be forced to sell rice to other government agencies like Department of Social Welfare and Development (DSWD) and local government units (LGUs) at slightly higher rice.

Agriculture Secretary Emmanuel Piñol Agriculture Secretary Emmanuel Piñol

Agriculture Secretary Emmanuel Piñol said that the NFA Council, the highest policy making body of NFA, approved a resolution that sets the price of rice to be sold to government agencies like DSWD and LGUs at P37 per kilogram, instead of P27/kg.

With the passage of Rice Liberalization Law or RA 11203, NFA was left with the sole responsibility of making sure that rice is available when calamities and disasters hit the country. But since the law also bans NFA from importing cheaper rice, the state-run grains agency has to beef up its procurement of locally produced unhusked rice.

According to Pinol, the higher price will help the agency recover the cost of purchasing locally produced rice at a fixed price of P20.40/kg and P20.70 per kg for individual farmers and farmer cooperatives/organizations, respectively.

The cost of producing rice in the Philippines stands at P12 per kilo, which is more than half of the production cost of Thai and Vietnamese rice farmers. This is why local rice is more expensive than the imported rice.

"As soon as we start releasing locally procured rice in the market by September, we will sell to government agencies at P37/kg," Piñol reiterated.
Even with a liberalized rice sector, the government decided that NFA will still sell rice at cheaper price of P27/kg but only in selected areas for what Piñol called "surgical marketing operations."

"We will continue to release rice to the market even after we consumed our imported rice stocks," Piñol said. "But we will not operate in areas that have surplus."

Aside from Metro Manila, the NFA identified 40 provinces with high poverty incidence that could benefit from this scheme.

As of this month, NFA is buying more locally produced unhusked rice than ever, seeing its January to May palay procurement up by 5,636 percent from 71,420 bags last year to 4.025 million bags this year.

"NFA under the new law is designed to source its stock from local farmers only. Since we need to have 15 million to 30 million bags to fulfill our buffer stocking requirement, we have to procure more,” NFA Acting Administrator Tom Scares said.

Escarez will also now sit as NFA Council's vice chair, while Piñol is the Chairman.

NFA just recently submitted its proposed restructuring plan, with minor reservations, to the Governance Commission for GOCCs (GCG), for review and approval, as stipulated in the Implementing Rules and Regulations (IRR) of RA 11203.

As required by law, NFA must undergo a transition period of "at most 60 days" to suit its new function.

"While our reorganization is still a work in progress, we are happy to announce that majority of what we have planned, and agreed on, based on the nationwide consultations conducted by our Change Management Team (CMT), were approved by the NFA Council," Escarez said.

"With the Council’s imprimatur, we are confident that the outcome of this restructuring will be a win-win situation for our employees," he added.
As agreed in the nationwide consultation meetings on NFA's restructuring plan, Escarez said provincial offices will be reduced from 86 to 45 and renamed as branch offices.

About 839 employees will also be affected and retrenched with the restructuring of NFA.