PH government has less than a day’s buffer stock of rice

Photo from ABS-CBN News.

The Philippines’ Malacañang Palace revealed yesterday that the National Food Authority (NFA) currently has less than a day’s buffer stock of cheap rice, even as the government insists that the country’s overall rice supply remains sufficient.

Secretary to the Cabinet Jun Evasco, who also heads the inter-agency NFA Council, said the food agency only has about a third of a day’s worth of buffer stock of rice.

This is equivalent to an estimated 200,000 bags of the cheap staple.

The NFA is required to have a 15-day buffer stock at any given time and a 30-day buffer stock during the lean season.

Apart from being sold in the market as an affordable option, NFA rice is also distributed to families affected by calamities.

He said the NFA Council has asked the Commission on Audit to determine why the NFA sold a bulk of its rice supply to retailers from October to January during the harvest season and did not release just as much during the lean season, which usually starts in July.

He also questioned why there was “reluctance” on the part of the NFA management to buy palay (unhusked rice) from farmers at the start of the harvest season, where the PHP17 (US$.33) selling price is competitive for farmers.

“They are no longer competitive using PHP17 if they buy rice at the end of the harvest season because they will not be competing with private traders who will be buying palay at PHP25 (US$.48). But the 17 is more competitive if NFA management will buy palay at the onset of harvest season. Because for all you know, farmers are ready to sell their palay to recoup the cost of production in the past three months,” Evasco said.

He said this move by the NFA management, led by Administrator Jason Aquino, could be one of the reasons for the depletion of the buffer stock of rice since farmers opted to sell their rice to private traders for a much higher price at the end of the harvest season.

“Now, it seems to me that there is reluctance. That is the reason why the buffer stock isn’t that stable because for all you know, the buffer stock is taken from the palay which NFA purchased using the support fund given by Congress, when in fact this year, the support fund is PHP7 billion (approx. US$134 million). More than enough, more than enough,” Evasco said in English and Filipino.

The official said the NFA management has been asking the NFA Council to increase the support price from PHP17 per kilo of palay to over PHP20 (US$.38). This, however, was rejected by the Council because of fears it would create an inflationary effect on the price of rice and other basic products.

Evasco, meanwhile, explained that the COA audit will determine whether the NFA was buying palay at a proper timing.

“Why will you release so much rice to the market when it is in time of the harvest season? Comparing this to the June, July, August, we found in the report that there was less rice given out to the market when at that time it was lean months. Meaning to say, there [was less] rice available in the market,” Evasco said.

“So that’s the reason why we are asking COA to conduct an audit, if only to clarify things and maybe absolve NFA. That’s why I don’t want to pass judgment on that because it might preempt whatever findings COA would have on the matter.”

Despite the low buffer stock of the cheap staple, Evasco assured the public that more rice will arrive in the country in the coming months, including the 250,000 metric tons of imported rice in May.

“From the reports of DA (Department of Agriculture) Secretary during that meeting of March 19, there is nothing to fear because there is rice,” he said.

“According to the DA Secretary, it’s only now that they have a big harvest from the Filipino farmers – that’s why there was no panic on our end. Because the purchase of rice is time on — to arrive on May, in time for the start of the lean months.”

The National Economic and Development Authority also said absence of the cheap staple in the market should not trigger high rice prices, as the NFA accounts for only 8 percent of the market and is not big enough to influence prices.

with minor edits. 

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