Review of NFA support price set

Pangilinan mulls gradual weaning away of farmers from gov’t support

MANILA, Philippines - The government wants to slowly wean rice farmers away from the price support provided by the National Food Authority (NFA), but no drastic changes to the subsidies provided by the state-run food agency would be immediately implemented, said Presidential Assistant for Food Security and Agricultural Modernization Francis Pangilinan yesterday.

In a briefing on the sidelines of the Responsible Business Forum on Food and Agriculture held in Makati, Pangilinan said the NFA Council would start reviewing the NFA’s rice subsidy program on July 16 to come up with the means to gradually remove the price support and replace it with production support.

Pangilinan earlier said the agency’s price support program has resulted in the accumulation of debts by the agency which now total P160 billion.

“We are not looking at a drastic removal of any of these subsidies. These have to be calibrated, measured and spread over time. And we are looking at other ways of increasing incomes apart from direct price support,” he said.

He said that instead of providing direct price support, the NFA would provide assistance to increase yield and lower the cost of production.

“We want to move slowly away from price subsidy and move towards special assistance to increase yield. Ultimately it’s about increase in income. Price subsidy is increase in income by buying, but special assistance can come from other forms of support like credit which makes for better yields especially if you have market access,” he added.  

Pangilinan, however, declined to specify the proposed reforms to the NFA pending discussion by the council.

“I don’t want to preempt the council. I can only go with general terms,” he said.  

Pangilinan’s pronouncement has drawn criticisms from farmers and civil groups who say this would put farmers at the mercy of traders.

The NFA buys clean and dry palay (unhusked rice at P17 per kilogram, providing additional incentives such as graduated delivery fee of up to a maximum of P0.50 per kilogram, drying incentive fee of P0.20 per kilogram, and Cooperative Development Incentive Fund assistance of P0.30 per kilogram.

In turn, it sells well-milled rice at P34 per kilogram and regular rice at P27 per kilogram.

The NFA also imports rice for buffer stocking during the traditionally lean months of July to September when local palay prices are high and supply is thin.

The government programmed for importation this year 800,000 metric tons. The shipments are scheduled to arrive until September.

“We will have an additional 200,000 metric tons that will be imported this year. That has already been approved by the NFA Council so we are working on that. We will also discuss that during our July 16 meeting,” said Pangilinan.