‘Illegal to sell NFA rice buffer at Kadiwa’

MANILA, Philippines — Agriculture experts said the decision of the government to sell rice at P25 per kilo at Kadiwa stores is illegal as it violates the provisions of Republic Act 11203, the Rice Tariffication Law (RTL).

In an interview with “The Chiefs” on Cignal TV’s OneNews channel Tuesday night, Federation of Free Farmers (FFF) national manager Raul Montemayor noted that the Department of Agriculture (DA)’s ongoing program of selling rice at P25 per kilo comes at a loss to the National Food Authority (NFA).

“When they sell rice in the Kadiwa at P25, NFA loses at least P10 per kilo. That’s a lot of money. The P9-billion budget of NFA will be gone with one to two cycles of selling rice to Kadiwa in subsidies for consumers, aside from the fact that it’s not supposed to be done because the RTL says it’s only for calamities,” Montemayor said.

President Marcos has said the government is inching towards its goal of lowering the price of rice to P20 per kilo, which was his campaign promise.

“It’s artificially cheap rice because, in fact, the government is losing a lot of money by selling at P25, so how far they can do that? For me the aspiration of P20 to P25, that is not the urgent concern now. Let’s focus first on helping our farmers, encouraging them to plant so that they can supply enough rice for us, later on reducing the cost of production,” Montemayor said.

He said without the subsidy from the NFA, the government needs to lower the farmgate price to P12 to P13 per kilo if it wants to sell at P25 per kilo.

“Farmers will suffer losses if that is done. Nobody will plant if that happens,” Montemayor said.

He said the retail price of rice is at P40 per kilo if the farmgate price of palay is at P20 per kilo.

“Normally it’s two times. The normal rice that the poor buy, which is the cheapest, used to be at P36. I understand it’s now P40. This is also the same price NFA sold at the Kadiwa so there is a big disparity between the Kadiwa price and the retail price in the markets,” he said.

Montemayor said the practice also depletes the buffer stocks of the NFA.

“The NFA loses money, it depletes the buffer stock. I even read that the government tasked the NFA to give rice allowances to government employees, using the buffer again. What if we are hit by a strong typhoon, how can the government respond?” the FFF officer explained.

Montemayor said the RTL did not equip the NFA to secure buffer stocks from alternative sources.

“If this mode of acquisition does not work, the government should have a leeway, otherwise, they will take steps that might eventually  hurt the farmers by importing millions of tons, it will cause a drop in the farmgate price of palay,” he warned.

For his part, former DA undersecretary Fermin Adriano said the buffer stocks of the NFA should be used only for emergency and disaster response.

“It has a purpose. You are not conforming with the purpose, you are stretching your imagination. The concept per se is not a bad idea, it’s the way you are applying because that is not the purpose of the buffer stock,” Adriano said.

He said it is better for the government to increase the buying price of palay from the farmers.

“It’s only right to increase the support price as incentives to the farmers but if you are going beyond the objective, and then you blame the idea for failure to meet your objective, that’s contrary to what is just,” he said.