DA declares food security emergency
Agriculture Secretary Francisco Tiu Laurel Jr. declared a food security emergency on Monday, as he had announced earlier, to address the “extraordinary” rise in retail prices of rice.
The food security emergency declaration, contained in Department Circular No. 3 issued by the Department of Agriculture (DA), will remain in effect “until lifted or withdrawn” by the agriculture secretary.
It was issued as retail rice prices remained high despite a decline in global rice prices and a reduction in rice tariff rates to 15 percent since July last year, from 35 percent previously.
Gov’t data, market prices
The National Price Coordinating Council (NPCC), which includes the DA, recommended this declaration, stating that, “There is an extraordinary increase in price of rice when the rice inflation has exceeded the upper bound target for food inflation and reached double digits.”
Citing the latest data from the Philippine Statistics Authority (PSA) covering the year 2023, the NPCC said rice inflation remained as high as 17.9 percent in September that year, exceeding the upper band of the government’s target of 4 percent for food inflation.
The PSA reading was significantly higher than the 4.2-percent rice inflation recorded in July 2023.
The NPCC noted further that prices of regular and well-milled rice remained high—up by 19 percent and 20 percent, respectively, in December last year, compared with the period before the price increases in July 2023.
But according to the DA’s monitoring as of Feb. 1, public markets in Metro Manila sold local regular milled rice from P37 to P46 per kilo, lower than the P50-P53 per kilo in the same period a year ago.
Local well-milled rice was priced between P40 and P55 per kilo, also lower than the P49-P55 per kilo a year ago.
Imported rice was also sold at lower prices, with the regular milled variety at P38 to P48 per kilo and well-milled rice at P40 to P52 per kilo.
Buffer stocks
Under the amended rice tariffication law, the agriculture secretary is authorized to declare a food security emergency on rice due to supply shortage or extraordinary increase in prices, as recommended by the NPCC.
“This emergency declaration allows us to release rice buffer stocks held by the National Food Authority (NFA) to stabilize prices and ensure that rice, a staple food for millions of Filipinos, remains accessible to consumers,” Tiu Laurel said in a statement on Monday.
The NFA’s buffer stocks stood at approximately 300,000 metric tons of rice. The DA said half of it could be released over the next six months to ensure sufficient supply for emergencies and disaster response (See related story on Page A4).
The NFA’s rice stocks will be sold to government agencies, local governments and outlets under the Kadiwa ng Pangulo program to “stabilize rice prices and protect consumers from further price hikes,” the DA said.
The supply will be released to these government outlets at P36 per kilo and sold to consumers at P38 per kilo.
NFA inventory
The Federation of Free Farmers (FFF) had earlier warned against an emergency declaration and questioned if such a move would cover the “NFA’s poor stocks management.”
In a statement on Monday, the FFF pointed out that NFA warehouses were reportedly full during the dry season harvest starting this month.
“An emergency declaration would allow NFA to sell its inventory to national government agencies, local government units and Kadiwa stores, thereby freeing up warehouse space for the agency’s palay procurement,” FFF president Dioscoro Granada said.
This announcement would pave the way for selling NFA stocks at “subsidized” and “below-market rates,” he said.
“Aside from causing the agency to incur huge financial losses, the sale of cheap NFA rice could open the door to widespread leakages and corruption. It could also work against farmers if traders decide to lower their palay buying prices to compete with NFA rice,” Granada added.
The FFF said about one-third of the NFA’s current inventory could already be classified as “aging” rice and should have been disposed of earlier to interested buyers without an emergency declaration.
