The Curious Case Of The ‘Disappearing’ NFA Rice

Satirical meme courtesy of The Adobo Chronicles

In my previous life, I was a Special Assistant to the then Administrator of the National Food Authority (NFA), so I know quite a bit about the agency’s role in stabilizing rice supply and prices in the country.

NFA achieves its mission to ensure food security by purchasing palay from farmers, maintaining sufficient buffer stocks at its warehouses across the country for distribution to marketing outlets when the need arises, and regulating/monitoring the rice trade to ensure that this primary staple is available and affordable at all times.

NFA has been in the headlines of late because commercial prices of rice have increased while there has been a short supply of affordable NFA rice.

How did this come about, you might ask.

There are two ways NFA beefs up its buffer (reserve) stocks: one by buying directly from local farmers, the other by importing rice when warranted.

Currently, NFA’s buying price for local produce is P17 per kilo. In many instances, private traders pay more than what the NFA pays, which benefits the farmers.

It is when the NFA cannot buy enough local rice (either because of competition from private traders or there is short supply due to production shortfalls), that it resorts to importation.

NFA seeks to maintain a 15-day supply in its warehouses at all times so that when commercial supply and prices become a problem, it is able to stabilize the market.

So what happened recently?

Commercial prices of rice have increased to the detriment of Filipinos who rely on the more affordable price of NFA rice.

This is exactly the kind of situation where NFA is supposed to interject in the market. Unfortunately, NFA stocks have been depleted over the last several months and the NFA Administrator had recommended that the agency import rice to replenish its buffer stocks. (Private traders are also importing rice from foreign commercial sources.)

The recommended rice importation was not approved by the NFA Council. The Council is an independent policy-making body, separate from the NFA Administration. The Council, headed by Cabinet Secretary Jun Evasco, is composed of people from various political, business and financial sectors.

My sources tell me that the Council members would rather that private traders do the importation directly — which is where the problem begins.

Private traders now dictate and control the buying price of local rice produce (NFA cannot compete with the higher buying price by private traders), but now also dictate the price of their imported rice.

NFA is put in a compromising situation because it no longer has the rice supply it needs to affect the market. That’s the reason that affordable NFA rice (which usually sells at P27-P32 per kilo, depending on the grade of the rice) has ‘disappeared’ from the market. Consumers now have no choice but buy their rice at the commercially-dictated prices.

And all because the NFA Council refused to approve the NFA Administrator’s earlier recommendation to import rice.

And because many people don’t realize that the NFA Administration and the NFA Council are not one and the same, they are putting the blame on NFA.

Not fair.

NFA Administrator Jason Aquino and NFA Council Chair Evasco are both appointees of President Rodrigo Duterte.  You would think that they are on the same team.

We can only speculate why there was a big conflict when it came to the rice importation.

Aquino is a retired military man.  Evasco is a former rebel priest. But I make no insinuations, just an observation.