Close  

NFA needs major role change to remain relevant – PIDS

/ 10:53 AM October 22, 2018

Rice stock. INQUIRER FILE PHOTO

For the National Food Authority (NFA) to stay relevant in a deregulated rice industry, the country’s premier think tank said it must stop regulating imports and instead focus on maintaining a buffer stock.

In a study published by the Philippine Institute for Development Studies (PIDS) entitled “Options for reform of the National Food Authority,” it said the command-and-control approach of the agency had become outdated and must shift towards a market-based approach.

ADVERTISEMENT

This entails the transformation of the NFA into a “pure buffer stocking agency with no regulatory mandate over the rice market.”

“Under this option, the private sector owns stocks but is contracted to sell them to NFA in the event of emergency at market price, thereby realizing greater efficiencies from private sector management,” the study said.

FEATURED STORIES

“In the long run, the ideal setup is reliance on the private sector in all provinces. Transitioning to this involves a wider private sector development… setting up of mandatory rice grades and standards, establishment of a warehouse receipt system, and upgrading of the value chain,” it added.

However, PIDS noted that for the set-up to work, competition among industry players must be “vigorous,” and may not be ideal when large traders are given the avenue to manipulate prices.

“Hence, the Philippine Competition Commission must consistently enforce fair competition in the rice market,” it said.

While the grains agency may still operate as it is under the rice tariff regime wherein import quotas on rice would be lifted, the think tank did not recommend it. The NFA maintaining its import monopoly and licensing powers may only work as a barrier in opening the market to competition, it said.

Currently, the NFA is mandated to maintain a 15-day buffer stock at any given time and a 30-day buffer stock during lean months, or when local harvest is at its lowest.

However, following the recent shortage of the staple, President Rodrigo Duterte ordered the increase in the national rice inventory to last for at least 60 days.

The country will finally open its doors to a free-for-all rice importation before the year ends following the passage of the Rice Tariffication Bill, in a bid to provide consumers with cheaper rice.

ADVERTISEMENT

A separate study by PIDS stated that the deregulation of rice imports may result in a reduction of P6 per kilo in prices in the market, where the staple currently sells at an average of P44 a kilo. /cbb

Read Next
LATEST STORIES
MOST READ
Don't miss out on the latest news and information.
View comments

Subscribe to INQUIRER PLUS to get access to The Philippine Daily Inquirer & other 70+ titles, share up to 5 gadgets, listen to the news, download as early as 4am & share articles on social media. Call 896 6000.

TAGS: Business, import liberalization, NFA, PIDS, rice, Rice Tariffication Bill
For feedback, complaints, or inquiries, contact us.
newsinfo

Local flights canceled due to ‘Amang’

January 21, 2019 09:31 AM

newsinfo

Duterte visits wake of Henry Sy Sr.

January 21, 2019 09:18 AM




© Copyright 1997-2019 INQUIRER.net | All Rights Reserved

We use cookies to ensure you get the best experience on our website. By continuing, you are agreeing to our use of cookies. To find out more, please click this link.