No more cheap NFA rice in 2019 – Piñol

MANILA, Philippines – The government cannot afford subsidized rice anymore, according to Agriculture Secretary Emmanuel Piñol.

Piñol said the National Food Authority (NFA) will halt the sale of subsidized rice once the agency's approved imports get depleted in 2019.

The NFA currently sells rice at P27 and P32 per kilo.

During a year-end briefing on Tuesday, December 18, Piñol said that the pricing of NFA rice is not "realistic" and should have been "removed a long time ago." (READ: A history of rice crisis in the Philippines)

The agriculture chief added that the NFA would incur huge debts if it continues to distribute rice at such low prices.

However, Piñol said that the rice tariffication bill, which President Rodrigo Duterte is set to sign into law, would bring rice prices down. (READ: Duterte won't fire Piñol, NFA's Aquino over rice crisis)

The National Economic and Development Authority earlier estimated that the measure would lower rice prices by as much as P7 per kilo.

The NFA will still remain intact after the bill is signed into law, but will be limited to keeping buffer stock for emergency purposes.

What should Piñol do? Senator Francis Pangilinan slammed Piñol, saying he should "fulfill [his] duty to provide available and affordable rice, not create alarm."

In a statement on Wednesday, December 19, Pangilinan called on Piñol to do the following:

Bantay Bigas spokesperson Cathy Estavillo also warned of the consequences of failure to provide cheap rice.

"Magdudulot ng malawakang kagutuman sa tinatayang 10 milyong pamilya na umaasa sa murang bigas.... Dagdag pa ang implementasyon na P2 excise tax sa langis na magreresulta sa pagtaas ng inflation," Estavillo said.

(This will cause widespread hunger to around 10 million families who are relying on cheap rice.... Add to this the implementation of the P2 excise tax hike on oil which will result in higher inflation.)

Piñol was earlier criticized by local farmers for favoring unlimited rice imports. Local groups said Filipino farmers will have difficulty competing with cheaper imports.

Countries like Vietnam and Thailand can produce rice at a lower cost because of geographical advantages and more government support.

The Philippines struggles with lowering production costs due to problems in accessing credit, lack of upgrades in farming technology, as well as weather disturbances.

The rice tariffication bill provides a P10-billion fund for farmers, but farmers' groups warn it may not be enough and might even be another tool for corruption. – Rappler.com

Ralf Rivas

A sociologist by heart, a journalist by profession. Ralf is Rappler's business reporter, covering macroeconomy, government finance, companies, and agriculture.

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