Group pushes liberalized rice imports.
A group of prominent economists urged Malacanang to fully liberalize rice trade in the country, especially at this time that prices of the household staple are surging past reasonable levels, thereby hurting the poor.
The Foundation for Economic Freedom (FEF)called for an end to the legal monopoly of the National Food Authority (NFA) to import rice.
'If private traders can freely import rice, they can quickly respond more to the needs of the rice market. The price of rice in our rice-exporting neighbors is about half the domestic price of rice. There is no reason why rice prices should become unstable and rise since there is plentiful supply from our neighboring countries that can be easily tapped by our private traders,' FEF said in a statement.
FEF agreed with Agriculture Secretary Emmanuel Pinol that there were rice traders in the market who manipulate the price whenever the market became vulnerable.
'Private rice traders start delaying the release of their stocks hoping that another week's wait can give them a few more millions of pesos in profit, inducing a shortage for the price to start rising. When other traders learn about it, some of them follow, hoping to get more profits. If the DA secretary does not check this herding behavior quickly, a rice price spiral happens at the expense of the poor,' the group said.
'Price manipulators may exploit the situation but they cannot sustain their price speculative attack if the NFA stock to total stock ratio is just right,' FEF said.
'However, this is not the case. This year started with a very low stock ratio. The average ratio in 2017 was only 10.3 percent. In years when the rice price is relatively stable, total NFA stocks are about 30 percent. In 2010, when the NFA warehouses were overly stocked with rice, the ratio averaged 52 percent,' it said.
The NFA maintains rice stock for 30 days at the start of the three-month rice lean season of July to September, and for 15 days at any time for emergencies and natural calamities.
In 2017, when the country experienced the Marawi City siege and the eruption of Mayon volcano, the group noted that the NFA had to move rice stocks to these areas, depleting its inventory. FEF lamented that the NFA management did not restock its emergency rice inventory to 15-day level and that it was only now when prices had moved up that NFA management sought the President's clearance to import 250,000 metric tons.
'The low level of NFA stocks makes the rice market vulnerable to price manipulation by rice traders. This happens if there is monopoly in rice imports,' FEF said.
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|Publication:||Philippines Daily Inquirer (Makati City, Philippines)|
|Date:||Mar 6, 2018|
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