BY JP LOPEZ

THE National Food Authority yesterday informed foreign rice sellers it was buying 500,000 tons of rice for delivery between April and June for P15.47 billion or almost P31 a kilo to shore up stocks amid rising prices and supply shortfall.

NFA said the tender will be made on April 17, covering 400,000 tons of 25 percent "brokens," 50,000 tons of 15 percent broken and 50,000 tons of 5 percent broken.

In dollar terms, the NFA tender is worth $370 million, translating to an average of $740 a ton for the three grain varieties. This compares with $796 a ton for parboiled white rice from Vietnam.

Possible sources are Thailand, Vietnam, China, Pakistan, Australia, the United States and India.

Earlier this week, the Philippines, already one of the world’s biggest rice importers, said it could buy up to 2.2 million tons this year in what could be its biggest overseas purchase of the grain in a decade.

It has already purchased around 1.2 million tons of rice for this year.

But with prices of foreign rice at doubled levels at the end of last year, and overseas traders hoarding the grain, the country has failed to source all the volume it has asked for in three straight auctions.

President Arroyo earlier asked the Vietnamese prime minister to secure up to 1.5 million tons of rice but Hanoi could only offer 1 million tons.

NFA-imported rice is reserved for government outlets which sell rice at P18.50 a kilo. At the tender price of P31 a kilo landed cost, the government will be subsidizing up to half of the low-priced rice.

But because of worries of the political fallout from rising prices, traders said, the Arroyo administration has no choice but to bite the bullet.

The traders said the proportion of "brokens" specified by the NFA means the government is scraping the bottom of the global rice trade.

They said broken rice is normally removed during the milling process to meet the standard specification of not more than 4 percent brokens ("binlid").

The brokens are usually separately sold for animal food and for brewing.

They said brokens end up mushy when cooked and are of poor table quality.

They said NFA specification for premium rice calls for zero brokens.

Sen. Manuel Roxas II said the government’s supply deal from Vietnam for 1.5 million metric tons of rice only proves Malacañang’s neglect of the agricultural sector.

Roxas said the purchase deal would cost roughly P40 billion to P46 billion at prevailing prices.

"I reject that the government is helpless. I reject that there is nothing else that can be done aside from importing rice, aside from pleading to traders not to hike prices and appealing to consumers not to eat more than a cup of rice per meal," Roxas, chair of the Senate Trade Committee, said.

Roxas said that the importation of rice will benefit farmers in Vietnam while local farmers continue to bear the brunt of high fertilizer and transport costs as well as insufficient financial and technical assistance from the government.

"Ang unang hakbang sa paglutas nitong nakaambang krisis: magpaka-totoo ang gobyerno. Huwag nang hintayin pang pilahan ang mga bigasan bago aminin na may problema tayo sa supply ng bigas," he said.

He challenged Arroyo to lead the people by supporting a temporary suspension of the 12 percent value added tax on oil which would provide immediate and substantial relief to all Filipinos including farmers, fisherfolk and the transport sector.

He also stressed that the President has sufficient powers to curb rice smuggling and hoarding.

The administration should also tap the local government units as price monitors and anti-hoarding watchdogs.

NOT ALARMISTS

"We are not being alarmists when we call on government to act on the rice problem. Different farmers’ organizations have already expressed their own concern over soaring rice and oil prices. Let’s work together to help surmount this problem. I reiterate my proposal to the President that she convene the LEDAC for a sober discussion on remedial measures to help our farmers and consumers during these difficult times," he said.

He lamented that government is incorrectly claiming there is sufficient supply but prices are going up due to high prices in the world market.

Roxas said the impact of increased fertilizer costs on the selling price of rice is not that substantial to have raised the cost from P24-P26 to P28-P30 since last month.

He said the implementation of existing policies to enhance agricultural productivity – such as the recently-renewed Agricultural Competitiveness Enhancement Fund (ACEF) – should be improved.

"Sa nakaraang siyam na taon nito, napuna na hindi naging maka-buluhan ang impact ng pondong ito. Ngayong may dagdag na pitong taon, dapat ang natitirang P7 bilyon na pondo nito ay mapunta sa pagpapalakas ng produksyon," he said.

He added: "So far, P3 billion worth of loans have already been granted from the fund, but only 3 percent of this was allocated to rice. It’s high time that we review how the ACEF is being used."

The ACEF was created 12 years ago through R.A. 8178, the Agricultural Tariffication Act, to enable the agriculture sector to better compete globally. The ACEF proceeds are to be set aside for irrigation, farm-to-market roads, post-harvest equipment and facilities, credit, research and development and other similar forms of assistance.

Rep. Edno Joson (Ind., Nueva Ecija) filed House Bill 794 which seeks to privatize rice importation.

Joson, an agriculturist, said the proposed Rice Importation Act would help stabilize the rice prices by stripping the NFA of its power to monopolize the importation of rice.

Under PD 1770, the NFA has the power to import or cause the importation of food products or commodities, or raw materials, equipment and facilities needed for the manufacture and processing of food commodities.

While the NFA has undertaken rice importation, Joson said the agency’s debt stock has also risen because "it has also allowed farmers, cooperatives and other players in the grain industry to import rice." – JP Lopez, Wendell Vigilia and Reuters