The Rice Tariffication Law (RTL) has resulted in the retrenchment of hundreds of employees in the National Food Authority (NFA) and the removal of the government's power to regulate rice prices, but the state-run grains agency is making it clear that they are not in favor of calls to amend the law.
NFA Administrator Judy Dansal said NFA is not supportive of calls to amend the RTL, which was implemented last year and removed NFA's regulatory powers, leaving the agency with a sole mandate of securing the government's buffer stocks for calamities and national emergencies.
"There are a lot of misguided groups who want to review the RTL. We don't support these groups," Dansal said.
"Our position is that RTL has nothing to do with the declining price of palay. RTL will be helpful to farmers," she added.
Dansal’s statement came after the Federation of Free Farmers (FFF) urged Congress to immediately review the RTL following the drastic drop in palay prices for the second year in a row.
Farm-gate prices have reportedly dropped to between P11 per kilogram (/kg) to P13/kg for wet palay, and P14/kg to P17/kg for dry palay.
Prices are expected to go down even more when harvests reach their peak this month and in November.
FFF is against the removal of NFA’s direct involvement in the market and ceding the management and control over the rice industry to the private sector.
It also said that difficulties in drying and transporting grains and the limited outreach of the NFA have also contributed to the recent drop in prices.
Dansal, for her part, admitted that NFA indeed lacks drying facilities, which prevents it from buying as much palay.
RTL, which paved the way for unlimited rice importation in the Philippines, seeks to compensate for the entry of cheaper imported rice in the country by the provision of mechanization and free seeds to Filipino rice farmers.
These interventions, funded by Rice Competitiveness Enhancement Fund (RCEF) or the tariff collected from imported rice should help lower the cost of production in rice, and eventually its retail prices.
Earlier, however, Dansal lamented the fact that RCEF is “clear in so far as the beneficiaries are concerned and NFA is not among them”.
She suggested that an additional fund coming from RCEF, she said, could help the agency procure more equipment.
“The budget being given by the national government is only to buy palay. Hence, we have no budget to buy rice mills,” Dansal told Business Bulletin.
“However, Secretary William Dar is doing his best to look for funds to support our present post-harvest facilities,” she added.
NFA currently has an annual budget of P7 billion for palay procurement.
When talking about NFA’s current challenges, Dansal also said the change in NFA’s mandate to “merely buffer stocking has the negative effect of removal of 40 percent of our personnel.”