Philippine: Thin rice reserves flagged as risk ahead of El Niño
Former Philippine Agriculture Secretary William Dar warned that thinning NFA rice reserves pose a greater concern than its procurement shortfall amid El Niño. NFA has procured 92,032 MT and targets 500,000 MT, while Dar proposed gradually building reserves from 30 to 90 days.
The El Niño event is highlighting the risks associated with the thinning levels of rice reserves maintained by the National Food Authority, former Agriculture Secretary William D. Dar said.
He called the thinning rice reserve a bigger problem than the NFA’s forecast that it will miss the 790,000-metric ton (MT) domestic rice procurement target.
Mr. Dar, who previously served as DA secretary, said the more pressing issue is how many days of rice reserve the country has on hand at any given time.
“Our rice buffer is thin throughout the year,” Mr. Dar told BusinessWorld.
NFA Administrator Larry R. Lacson said on Friday that the agency procured 92,032 MT in the first nine months and now expects to procure at least 500,000 MT by the end of the year, mostly from the wet-season harvest.
It is also projecting a 12% production decline due to El Niño.
Mr. Dar noted that NFA only purchases 3% to 5% of overall harvest, giving it limited scope to influence market prices.
He said India and the Middle East maintain rice reserves equivalent to 365 days of supply, enough to absorb two to three consecutive poor harvests. The Philippines has no comparable cushion and runs short after a single bad season.
He proposes a slow increase in reserve levels, starting with 30 days and gradually increasing to 60 and then 90 days over time.
A 90-day buffer would substantially reduce the Philippines’ exposure to natural disasters and other supply disruptions, he said.
Mr. Dar concurred that the shortfall in reserves is the result of funding constraints. The General Appropriations Act allocates funds only for NFA’s palay procurement, and not for other measures like warehouse construction.
“I don’t know why our policymakers, our leaders, are not giving priority to increasing the budget of NFA,” Mr. Dar said.
At a briefing on Friday, NFA officials said that to address limited warehouse capacity, the NFA has proposed a P10.363 billion allocation to build 36 modern facilities and rehabilitate 128 warehouses.
Mr. Dar also proposed tapping provinces with surplus rice production to contribute to a national reserve, easing the burden on the NFA.
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Source : BusinessWorld Online
