MANILA, Philippines - The country can repeal the quantitative restriction (QR) policy on imports to support the rice-sufficiency goal in a bid to address the increase in rice prices.
A paper by Roehlano Briones and Ivory Myka Galang, senior research fellow and research analyst, respectively, of government think tank Philippine Institute for Development Studies (PIDS), said self-sufficiency should be pursued with more realistic targets and more cost-effective support mechanisms to rice producers.
These support mechanisms include research and development and extension activities to generate and spread new rice farm technologies.
Briones and Galang considered this measure a permanent solution to the rice price spike that started in the third quarter of 2013.
The paper attributed the problem to the reduction in imports in line with the goal of the Department of Agriculture’s Food Staples Sufficiency Program (FSSP). This program sought a target of 100-percent rice self-sufficiency by the end of 2013 by raising domestic production and curbing imports.
"Such reduction was neither compensated by a commensurate increase in domestic production nor by a timely release from the buffer stock,” it said.
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The paper said the increment of 439,000 tons in palay production last year was not enough to counter the effects of the reduction in imports.
Given import tightening from mid-2013, farm harvests improved in the fourth quarter as farmers possibly anticipated higher rice prices and thus planned for a higher level of output, it added.
"The farmers made a profit from their correct forecast. These trends were advantageous for the farmers but clearly not for the consumers who took the brunt of higher rice prices. With less imports, the country missed taking advantage of the cheap rice available in the world market,” the paper noted.
The authors said the National Food Authority (NFA) could still have forestalled the price spike had it offset the deficit from its buffer stock even it had tightened rice imports.
However, NFA releases were inadequate due to a limited stock, controls on the release of NFA rice and the agency’s financial constraints that hindered it to respond quickly enough to use its buffer stocks and prevent the mid-year price spike.
"A short-term solution to enable NFA to respond to a rice price surge is to allow it to sell rice from its buffer stock at the market price. This way, NFA would be able to recoup its cost from palay procurement and create a space for it to maneuver during an impending rice crisis,” they said.
The paper also underscored the need to reform the functions of NFA.
"NFA should focus on regulatory duties and management of the domestic food security stock and not on rice marketing and importation,” it said.
Further, Briones and Galang pushed for the adoption of a more flexible policy toward imports.
"Such a policy can take the form of tariffication, a reform that requires new legislation. Tariffication offers a level of protection to farmers while allowing automatic adjustment of import levels in response to domestic production fluctuations,” they reasoned.
The paper also believed that rice importation should be done by the private sector, subject to payment of import duties, and in compliance with import licensing and permits to maintain food safety and environmental health.//
