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NFA SHOOTS FOR OVERHAUL OF RULES ON RICE IMPORTS
9/25/2017

BUSINESS MIRROR (25/09/2017)

NFA SHOOTS FOR OVERHAUL OF RULES ON RICE IMPORTS

The National Food Authority (NFA) is seeking to have the exclusive right to import rice from Asean member-countries at lower tariffs to boost its buffer stock after the quantitative restriction (QR) on the staple is lifted by Congress.
 
The food agency attached to the Office of the President made this proposal in a position paper it submitted to the House of Committee on Agriculture and Food chaired by Party-list Rep. Jose T. Panganiban of Anac-IP. The committee is currently reviewing a draft bill that would amend Republic Act (RA) 8178, or the Agricultural Tariffication Act.

NFA Administrator Jason Laureano Y. Aquino said the proposed bill should contain a provision retaining the food agency’s power to manage the country’s rice imports.

“However, even with the lifting of the QR, the NFA should still be given the ‘exclusive’ authority to import and manage the country’s food-security and buffer-stock requirements, which is the volume of rice requirement that cannot be served by the NFA with locally produced palay/rice”, Aquino said in the position paper, a copy of which was obtained by the BusinesMirror.

“Such authority should include the country’s commitments under Asean trade agreements,” he added.

Aquino said the government should be in charge of addressing the food-security requirement of the country, particularly in times of calamities and emergencies, as the private sector could be “unreliable in critical situations”.
“We cannot rely solely on the private sector to operate for ‘humanitarian reason’, or social responsibility more than their business/profit concern,” he said.

“The NFA has available logistics strategically located nationwide, hence it can immediately address food security concerns and respond to emergency situations,” Aquino added.

The NFA chief said the food agency should have the “exclusive” authority to import the annual in-quota minimum
access volume (MAV) of rice, particularly from Asean. Under the Asean Trade in Goods Agreement (Atiga), rice is slapped a tariff of 35 percent.

“The NFA shall have the exclusive authority to import the in-quota MAV and its Asean commitments at 35-percent tariff, at volumes equivalent to its buffer-stock requirement of at least 15 days, at any given time and 30 days, by July 1 of each year,” he said.

“Any excess volume after satisfying the buffer requirement, under the MAV in-quota rate of 35 percent, may be allocated to the private sector, subject to NFA rules and conditions,” he added.

Aquino also said the agency supports the proposal to allow the NFA to import rice at any given time sans a recommendation from the NFA Council (NFAC).

“The NFA agrees with the proposal to remove the need for a certification of shortage from the NFAC after consultation with the Office of the President to warrant importation,” Aquino said.

The NFAC is the highest policy-making body of the NFA. Under Presidential Decree 4, the NFA could only conduct state-facilitated rice importation upon the recommendation of NFAC whenever there is a foreseen “shortfall in domestic production, a critical demand-supply gap, a state of calamity or other verified reasons that may warrant the need for importation”.

In a separate position paper submitted to Panganiban, the Department of Agriculture (DA) supported the proposal of the NFA to let the food agency handle the government’s rice-importation scheme.

The DA said the importation of rice within the MAV from members of the World Trade Organization (WTO) and out-MAV from Asean member-countries should be exclusive to the NFA or whichever government agency is concerned. The private sector may only import rice at the MFN out-quota rate, currently pegged at 50 percent, subject to the rules and conditions of the NFA, according to the DA.
The DA also proposed that the President, upon the recommendation of the NFAC, shall have the power to adjust tariff rates as a measure to address the country’s food security requirements. This power, the DA noted, could be exercised by the President without consultations and even when Congress is in session.

“The President, upon the recommendation of the NFAC, is empowered to increase or decrease tariff rate to meet emergency requirements, to secure the government’s rice-buffer stocking and distribution program, and to meet the country’s trade commitments,” the DA’s position paper read.

The DA also said the bill amending Republic Act (RA) 8178 should include a provision that may authorize the NFA, upon the recommendation of the NFAC and approval of the President, to import rice at zero tariff rate. “The NFA may be authorized to import rice tariff-free upon recommendation of the NFA Council and approval of the President,” the position paper read.

“In the event that the NFA imports rice at zero tariff, half of the net income earned from the said importation shall be used to augment the Rice Competitiveness Enhancement Fund. For this purpose, the NFA must have a separate accounting for its tariff-free rice imports,” it added.

Under RA 8178, the NFA is the sole government authority mandated to regulate the importation and export of agricultural goods, particularly rice and corn.

The NFA implements the MAV commitment of the Philippines to the WTO. The NFAC determines whether it will be the private sector or the government that shall utilize the MAV allocation.

The Philippines’s MAV for rice will revert to 350,000 metric tons (MT), from the current 805,000 MT, once its QR on the staple is abolished, according to Agriculture Undersecretary for Policy and Planning Segfredo R. Serrano.

The NFA and the DA also said in their respective position papers that the agriculture secretary must be reinstated as a member of the NFAC. But the heads of the Bangko Sentral ng Pilipinas, Land Bank of the Philippines and Development of Bank of the Philippines (DBP) should be removed from the council, according to Aquino.

Aquio said the NFAC must be chaired by a representative from the Office of the President  with the rank of Cabinet secretary, while the food agency’s administrator would still serve as vice chairman. The rice and corn sectors should also be represented in the NFAC, according to Aquino.

At present the NFAC is chaired by Cabinet Secretary Leoncio B. Evasco Jr., with Aquino serving as vice chairman.

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