THE Department of Agriculture (DA) stated on Tuesday that the P20-per-kilo subsidized rice initiative will utilize the contingency fund of President Ferdinand R. Marcos, Jr.
The Office of the President has permitted the allocation of P5 billion from its contingency reserves to Food Terminal, Inc. (FTI), which will distribute rice purchased from the National Food Authority (NFA) to local government units (LGUs) and the Kadiwa network of government-supported agricultural markets, Agriculture Secretary Francisco Tiu Laurel, Jr. mentioned at a press briefing.
The FTI will allocate P4.5 billion for procuring the rice, while the remaining P500 million will be utilized for logistics and packaging, he added.
The P20 rice program — initially launched in the Visayas on a test basis — will also be available in Kadiwa outlets, the DA indicated on Monday.
The NFA currently sells rice to LGUs at P33 per kilo based on a food security emergency declared in late January. It incurs a loss of approximately P12 per kilo assuming a breakeven price of P45. LGUs then resell the NFA rice without an increase or at a slightly higher price of roughly P35 per kilo.
Mr. Laurel stated that with the NFA rice priced at P33, both the FTI and LGUs will need to contribute P6.50 each to bridge the P13 gap.
This implies that collectively, participating LGUs are anticipated to contribute about P4.5 billion towards the subsidy.
Providing rice at P20 per kilo would result in losses to the government ranging from P10 to P12 billion, according to Mr. Laurel.
He noted, however, that NFA stocks are stagnant because LGUs have not placed orders for almost three months following the rice emergency declaration.
He likened the program to a “moving-out sale,” emphasizing that if the NFA stocks — estimated at 370,000 metric tons — remain unsold for an extended period, it might be compelled to sell the inventory at even lower prices.
Mr. Laurel mentioned that LGUs are hesitant to purchase NFA stock due to the declining global price of rice, which has led some commercial retailers to offer rice at prices lower than the NFA rate.
“If we cannot sell them and they spoil in our warehouses, they depreciate in value. We attempted to sell at P33. It didn’t gain traction because retail prices of rice have also decreased,” he remarked.
The DA reported on Monday that global rice prices averaged $300 per metric ton, down from a peak of over $700.
NFA inventory surged to a five-year high equivalent to 7.56 million 50-kilogram bags of milled rice as of April 24.
Rice prices in Metro Manila markets varied from P39.99 to P58.17 per kilo between April 21 and April 24, according to DA price observers.
Mr. Laurel remarked that several countries, including Malaysia, Indonesia, China, Japan, and India, engage in rice subsidization, and the Philippines could have begun similar measures as early as 2024 if the NFA had sufficient stock.
Mr. Laurel indicated that the government might implement the P20 rice program nationwide by January.
A pilot initiative must operate for “at least six months” to evaluate its viability for national execution, he stated.
President Ferdinand R. Marcos, Jr. had instructed the DA to explore methods to maintain the program until his term concludes in 2028.
The pilot initiative in the Visayas is set to commence in Cebu on May 1.
Mr. Laurel expressed last week that the Visayas was selected for the pilot owing to its poverty rate, which surpasses the national average of 10.9%.
The program aims to assist about 400,000 families with the P20 rice, particularly targeting the most vulnerable segments of society.
An initial group of eight Kadiwa outlets in and around Metro Manila will also begin their own pilot on May 2.
Mr. Laurel, in the meantime, clarified that while the initiative is exempt from the election spending ban, participating LGUs still need to seek exemptions. — Kyle Aristophere T. Atienza
