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Agri chief Alcala to lawmakers: PHL needs to import rice to keep price spikes at bay
Importing an additional 500,000 metric tons of rice as part of measures to boost the buffer stock will help keep prices of the staple food of Filipinos stable in public markets, Agriculture Secretary Proceso Alcala said Wednesday defending government’s position on the matter.
Lawmakers can't blame President Benigno Aquino III for announcing during his State of the Nation Address that the National Food Authority (NFA) would import 500,000 MT of rice, the Agriculture chief said during his department's budget briefing at the House of Representatives.
“Hindi natin masisisi ang Pangulo. [His announcement] helps make the price of rice in the market lower. Alam ng traders ang buffer stock na hawak ng NFA… When the President announced during his SONA na mag-i-import pa tayo, this [sends the message] that enough supply is coming in. Patotoo ‘yun na magkaroon ng enough buffer stock ang NFA,” he said.
The half-a-million ton purchase is part of the NFA preparations against the ill effects of calamities on rice supply and prices.
The volume is on top of the 500,000 MT of rice set to be imported by the NFA through open bidding and the 800,000 MT it imported earlier this year, bringing the country’s total rice purchase to almost P2 million MT, its biggest in four years.
With these orders placed in the international market, the Philippines is on track to become the world's third biggest buyer of rice, up from the No. 8 spot it held last year, according to estimates by the US Department of Agriculture.
More buffer stock needed?
Bayan Muna party-list Rep. Neri Colmenares questioned the logic behind the NFA’s plan to import more of the commodity since, by Alcala’s admission, the department aims to achieve a rice self-sufficiency rate between 96 percent and 98 percent for 2014.
Addressing the Agriculture secretary, Colmenares said: “Your math doesn’t add up. DA imported 500,00 MT last year when we had a 96 percent rice self-sufficiency. Now, it wants to import more than 1 million MT [when you’re] looking to achieve a rice self-sufficiency rate of as much as 98 percent?”
In response, Alcala explained that the government needs to increase its buffer stock in order to stabilize the price of rice. The government does not import rice on a 1:1 ratio to address the projected gap between supply and demand, he said.
“If we’ll just let commercial traders take control [of rice stock], masyadong magagalit ang mamimili dahil magiging mahal ang average presyo ng bigas,” Alcala said.
Based on the Agriculture Department's projections, rice supply for 2014 will reach 12.38 million MT if the government achieves its harvest target of 19.06 MT. Demand for rice, meanwhile, is estimated at 12.9 million MT.
Rice production reached 4.3 million metric tons (MT) in the first quarter of 2014, up 3.28 percent from 4.17 million MT a year earlier.
P147B in savings
Despite having failed to achieve its rice self-sufficiency goal last year, Alcala said the department was able to score significant accomplishments since President Aquino assumed office.
"From 82 percent to 96 percent rice self-sufficiency, it shows we're doing something right... If we sum up what we imported from 2008 to 2010 and compare it with what we imported from 2010 to 2013, the government was able to save P147 billion from rice importation," he said.
According to department, the Philippines used to rely on imports alone to stabilize prices and supply based on an import dependency ratio of 13.57 percent from 2001 to 2010.
During the Arroyo administration, the Agriculture Department spent more on NFA imports than in production support in the 10 years to 2010 as in P105.6 billion for production compared to P292.5 billion for NFA imports, which induced a production growth rate of only 2.27 percent or a little over 313,000 MT annually.
The amount NFA shelled out for rice imports worth P176.18 billion was eight times the amount of P22.06 billion paid for the period 2011-2013, the department added. – VS, GMA News
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