Improved logistics network for NFA urged

MANILA, Philippines — The National Food Authority (NFA) must strengthen its logistics capacity to ensure that the country has enough rice buffer stocks that will be accessible during times of emergencies, an official of the Department of Finance (DOF) said.

Finance assistant secretary Antonio Lambino said while Republic Act 11203 or the Rice Tariffication Act ceased the import licensing and other regulatory functions of the NFA, it has retained the agency’s role of storing and providing emergency buffer stocks of rice.

As such, Lambino said the agency needs to enhance its logistics network to ensure that the government has enough buffer stocks with nationwide reach at all times.

The Rice Tariffication Act was signed by President Duterte last February, and became effective last March 5. The law liberalizes rice imports by imposing tariffs in lieu of quantitative restrictions.

This allows the private sector to import rice as long as long as they comply with the basic requirements set by the Department of Agriculture’s Bureau of Plant Industry (BPI) for food safety and the protection of local farming areas.

Lambino said the NFA’s task of regulating the rice sector was removed owing to its  “inefficiencies” resulting from a controlled import system. He said this left the agency saddled with debt amounting to about P145 billion.

He said domestic rice prices also continued to be high compared to other countries in the region despite the NFA’s regulatory role.

But with the Rice Tariffication Act in place, economic managers estimate that the price of rice would become lower and subsequently lower inflation by 0.5 to 0.7 percentage point this year.

 Lambino said farmers would get to benefit directly from the law through the Rice Competitiveness Enhancement Fund (RCEF), which would have an assured annual allocation of P10 billion regardless of the amount generated from import tax collections. 

 This, he said, would be earmarked for programs aimed to benefit farmers.

“We will have dedicated resources for the modernization and increased productivity of rice farming in the country,” Lambino said.

Aside from lowering rice prices and providing direct assistance to farmers, Lambino said the law would also be an effective deterrent to smuggling.

“The tariffication law is the most important weapon against smuggling. The incentive to smuggle would almost be nil because anyone can now import rice as long as they comply with the requirements,” Lambino said.

 “Who would be encouraged to hold on to their stocks when there is enough supply in the market and anyone can import if the supply declines?”  he added.