THE country has become the world’s biggest rice importer. Data from the National Food Authority showed that from 1984 to 1994, the country imported an annual average of 151,588 metric tons (MT) of rice. But from 1995, when the Philippines became a member of the World Trade Organization (WTO) to 2006, rice importation shot up to an annual average of over 1 million MT or a 587% increase.
Rice importation is done at the expense of local procurement. From February 1999 to October 14, 2007, the NFA bought palay at only P10 ($0.216 at the 2007 average exchange rate of $1=P46.148) per kilogram even as the actual farm gate price then reached P11.21 ($0.24).
Local palay is brought at a low price, as government insists into rice importation despite the availability of supply. This goes to show that agricultural trade liberalization coupled with state neglect is threatening the country’s food security and sufficiency.
In March last year, the country unwittingly jacked up global rice prices when it suddenly awarded a tender for the staple at $708 per ton (about P30 per kilo), up nearly 50 percent from the price it paid two months earlier.
The action eventually pushed rice prices to a record $1,080 per ton (about P45 per kilo) by April, as the world?s exporters and importers, along with speculators, began hoarding supplies in anticipation of even higher bids.
There was no local shortage to speak of. Aside from the importation of million tons of rice, the government has also allowed private entities to import 400,000 metric tons of rice.
Small scale rice farmers have constantly complained low support. They also continue to be saddled by high production costs, low rice prices, inadequate irrigation and facilities, and inaccessible credit. Who are we to tell them not to complain and be more optimistic when policy decision speaks otherwise?
There are proposals being broached to privatize the rice trading function of the National Food Authority. As the argument goes, the private sector would do a better job in stabilizing rice prices and in the long run eliminate corruption, hoarding and smuggling.
This is a losing proposition. Listen to the stories of how private traders abuse their discretion by repacking NFA rice and mixing it with commercial rice which are then sold at higher price.
The rice importation program is in compliance with government’s commitment to the World Trade Organization (WTO). Under the WTO's minimum access volume (MAV), the country is obliged to import a certain volume of rice whether or not there is a supply shortage. Would P-Noy’s administration take another approach? Email comments to roledan@gmail.com