The Federation of Free Farmers (FFF) called on legislators to carefully study the proposal to restore the National Food Authority’s (NFA) ability to sell subsidized rice to the public.
The group warned that the scheme could be costly, difficult to manage and detrimental to rice farmers.
“The intention to stabilize rice prices is good, especially for poor Filipinos. But the cost of doing this might become prohibitive,” said Raul Montemayor, FFF national manager, in a statement yesterday.
FFF said at least P31 billion annually will be needed if the NFA will provide a P10 per kilogram rice subsidy for the 4.4 million poor households covered by the PantawidPamilyang Pilipino Program.
If the beneficiaries of the subsidy will also include low income and middle-class households as proposed by some congressmen, the annual cost would balloon to over P119 billion per year.
The FFF also pressed government to prevent the adulteration or diversion of subsidized rice, such as by establishing dedicated distribution outlets rather than relying on rice retailers in public markets.
Montemayor said instead of distributing rice, it might be more efficient to issue vouchers that could be used to purchase rice from accredited outlets, noting that an aggressive rice distribution program may also pull down palay prices for farmers.
“If the NFA sells rice at P10 below the market price, local traders will have to lower their palay buying price by P6 per kg in order to compete with the NFA,” Montemayor warned.
Last Tuesday, the Committee on agriculture and food of the House of Representatives approved a substitute bill amending the Rice Tariffication Law (RTL) that was first enacted in February 2019.
Among the proposed amendments are provisions authorizing the NFA to buy or, if necessary, import rice and distribute these to the public, presumably at subsidized rates, in order to stabilize prices.
Under the current version of the RTL, NFA is limited to buying palay or rice only from local farmers and releasing its buffer stocks only during calamities.
