Rice subsidy reaches P6.9B - NFA already given more than half of allotment

May 21, 2008

State-run National Food Authority (NFA) already availed of more than half of its programmed tax subsidy this year in the first four months alone, the Department of Budget and Management reported Wednesday.

Budget Secretary Rolando Andaya Jr. said the tax subsidy extended to the grains agency from January to April reached P6.9 billion, or more than half of the P7.5 billion for the entire 2008.

As a result of higher spending by the food authority for rice importation, Andaya added that the government possibly will raise the programmed tax subsidy to accommodate additional expenses needed by the cash-strapped state firm.

Finance Secretary Margarito Teves earlier said they were considering a higher tax subsidy for the grains agency to compensate for the high prices of rice in the world market and to increase its buffer stocks.

This year, Teves added, the grains agency is expected to post a budget deficit of P43.1 billion from last year’s P17 billion.

Economists said the agency’s losses are seen to reach P136 billion by 2010 on account of high prices of commodities.

Andaya said the government has set aside P43 billion in the next two years to support the Agriculture department’s programs on rice sufficiency, production support, irrigation and post-harvest facilities.

To cut government spending on rice importation, the food authority scrapped the 50-percent duty imposed on rice starting last month. Under the lifting, commercial-rice traders will not pay the full duty, but only a service fee of P2 per kilo of rice.

President Gloria Arroyo also earlier lifted the country’s quota on rice imports.

At end-April, government subsidies extended to government-owned and controlled corporations and government financial institutions dropped 70 percent to P2.29 billion from P8.43 billion year on year.

This year, state subsidies are programmed to reach P10.12 billion, compared with P27.33 billion last year.

If the Philippine Rice Research Institute (PhilRice) is to be believed, the country can attain 100-percent rice self-sufficiency by 2010 with a projected production of palay (unhusked rice) reaching 19.70 million metric tons, enough to feed the Philippines’ projected population of 94.89 million.

The PhilRice website revealed that to attain a 100-percent sufficiency in rice by 2010, the government has to spend P14.89 billion in 2009 and P14.97 billion in 2010 or a total of P29.857 billion.

Palay production this year is projected at about 17 million metric tons for a population of about 89 million. At present, the country is 90-percent to 95-percent sufficient in rice production.

“That’s even 100.74-percent sufficiency level [for 2010]. Translating it to the terms of the current daunting issue, it means the country will be freed from scrambling for a rice-supply commitment from any member of the cartelized rice trader in the region,” said Dr. Anselmo Roque of PhilRice, referring to Asia.

The palay self-sufficiency plan is called “Focusing on Increasing Provincial Productivity,” which by its name will involve provinces named as “rice champions,” according to the PhilRice website. The agency had identified 49 provinces as “rice champions.”

Under the plan, each province will get a support fund, and a P1-million incentive will be given to the top three provinces that will exceed their palay production targets.

The palay self-sufficiency plan was formulated by a PhilRice team led by its executive director, Dr. Leocadio Sebastian, along with current and former officials of the Agriculture department, the International Rice Research Institute and a number of local officials and other government agencies involved in agriculture.

In a statement, Agriculture Secretary Arthur Yap said the plan is “highly doable because the planners themselves are teaming up to implement it.”

“Self-sufficiency in rice, after all, is not a puzzle to us Filipinos. Not so long ago, we had produced more than enough rice for ourselves, we even shared part of our produce to the world,” Yap wrote in the plan’s foreword.

The amounts to be spent in 2009 and 2010 are on top of the P43-billion FIELDS initiative of President Arroyo, where massive amounts of funds will be infused for fertilizers, irrigation and other rural infrastructure, education and training of farmers, dryers and other post-harvest facilities and seeds of high-yielding varieties.

According to PhilRice, the country can save up to $500 million annually from importing rice if local rice production is boosted to self-sufficient levels.
–Chino S. Leyco And Conrad M. Cariño

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