Agriculture Secretary Francisco P. Tiu Laurel Jr. called on lawmakers to restore the powers of the National Food Authority (NFA) to intervene in the rice market and stabilize prices.
In a testimony before the “Murang Pagkain Super Committee” of the House of Representatives on Wednesday, spearheaded by Albay Rep. Joey Salceda, Secretary Tiu Laurel emphasized that re-empowering the NFA to sell rice directly to the public would give the government a stronger ability to influence rice prices and protect consumers.
Since the passage of the Rice Tariffication Law (RTL) in 2019, the NFA’s role has been significantly curtailed. The law removed its authority to import rice and sell it directly to the public, restricting the agency to procuring palay from local farmers and solely for buffer stocking. The Department of Agriculture has sought amendments to the RTL, including the restoration of NFA’s market intervention powers, but these proposals have yet to be approved.
“I believe if we want to control the situation, it is better to restore all the powers of the NFA. It just has to be managed by honest people,” Secretary Tiu Laurel stated. “This will provide a long-term solution to the problem.”
The DA chief noted that NFA’s has a record buffer stock of nearly 6 million bags of rice that could be have sold to the market to significantly bring down price if it were empowered to do so.
Secretary Tiu Laurel argued that without the NFA’s ability to regulate prices, certain groups have been able to manipulate the cost of rice, exacerbating the impact on consumers. Secretary Tiu Laurel, speaking in Filipino, explained: “If the NFA’s power to intervene is restored, the Department of Agriculture would be more effective in curbing the influence of abusive rice traders. Right now, we are fighting with one hand tied behind our back.”
Prior to 2019, NFA is also empowered to license rice traders and to inspect warehouses to determine rice supply.
Iloilo Representative Janette Garin, in response, motioned for the National Bureau of Investigation to investigate the rice supply chain and assess whether there is market manipulation, similar to the case of skyrocketing onion prices a few years ago.
Secretary Tiu Laurel also credited President Ferdinand Marcos Jr.’s decision to reduce the rice tariff from 35 percent to 15 percent in July 2024 for keeping rice prices manageable. Without this reduction, he warned, prices would have been higher due to the peso depreciation and the increasing cost of locally procured palay.
According to Tiu Laurel, the average palay buying price of NFA this year is P27.45 per kilo, which translates to a retail price of around P49 for locally-produced well-milled rice. Imported rice, meanwhile, should retail for approximately P42 per kilo. He highlighted that local production currently accounts for 78 percent of the country’s rice supply, at 13 million metric tons, meaning the country still needs to import between 4.5 to 4.7 million metric tons annually, including a 10 percent buffer stock.
While rice import figures this year are higher compared to previous years, Secretary Tiu Laurel explained that this increase is partly due to the reduction in tariffs, which has helped disincentivize the smuggling of the staple food.
Salceda, an economist by training, noted that the lack of a regulatory framework for rice prices has resulted in significant welfare losses. He explained, “Because rice demand is virtually inelastic—meaning consumption doesn’t change despite price fluctuations—the absence of a regulator has led to welfare losses of P136 billion.”
Secretary Tiu Laurel’s remarks underscore the importance of restoring NFA powers as part of a broader effort to address inefficiencies in the rice market and ensure affordable prices for Filipino consumers. ###
