NFA to add 200,000 MT in rice storage capacity

THE National Food Authority (NFA) said it will augment its storage capacity for rice by 200,000 metric tons (MT) within two years to enable more grain purchases from farmers.

It said it will also need more capacity to supply the government’s P20-per-kilo subsidized rice program.

“We are modernizing. An additional capacity of 200,000 MT will be available in two years’ time,” NFA Administrator Larry del Rosario Lacson told BusinessWorld.

Mr. Lacson said the NFA is currently building more warehouses, acquiring additional equipment, and refurbishing current warehouses.

The Department of Agriculture (DA) has been seeking the restoration of NFA’s power to intervene in the rice market by releasing grain to regulate prices. This power was removed with the passage of the Rice Tariffication Law of 2019.

Prior to the law, the NFA had the power to import and sell rice directly to the public. At present, importing has been reserved for private traders, who need to pay tariffs on their shipments, originally set at 35% on Southeast Asian grain.

President Ferdinand R. Marcos, Jr. reduced the import tariff to 15% from 35% via an executive order issued in June.

The tariffs help support the Rice Competitiveness Enhancement Fund (RCEF), which will be tapped to modernize the rice industry via mechanization, seed, fertilizer, and rice cultivation know-how.

Mr. Lacson said the NFA’s previous power to sell rice to the market “on a regular basis” should be restored to allow it to cycle through the rice stocks held in its warehouses.

The NFA typically buys 4-5% of the rice harvest in the form of palay (unmilled rice). It said the ability to sell to the public will allow it to buy double that, he said.

“Under that system, the 4-5% that we buy will become 10%,” he said, adding that 15% is also possible.

“More consumers and farmers will benefit,” he said.

He noted that restoring the NFA’s powers would mean more savings for the grains agency and keep rice from overstaying in its storage facilities.

“Whether we like it or not, we are a tropical country. We need to maintain the stock,” he said.

Asked to comment on the proposed restoration of NFA powers, former agriculture secretary William D. Dar told BusinessWorld earlier this month that the NFA must have the funding to maintain a buffer stock equivalent to 30 days’ demand.

The 2024 amendments to the Rice Tariffication Law raised the funding for RCEF to P30 billion from P10 billion, and authorized the DA to declare a food security emergency that can trigger the release of NFA stocks.

In such an emergency, the NFA is allowed to sell its stock only to government agencies and local government units.

The DA still has over P9.8 billion available for palay procurement this year, suggesting a capacity to purchase 5 million 50-kilo bags of rice. — Kyle Aristophere T. Atienza