Options for National Food Authority Reforms in the Philippines - From Parastatals to Private Trade

Agriculture Reference

In-Depth Information

sumption. Based on this categorization, the country is classified into four ma-

jor areas: (1) very critical (provinces with negligible production that are almost

fully dependent on other provinces for rice supply), (2) less critical (provinces

with minimal production that are partly dependent for rice supply), (3) self-

sufficient (production meets the consumption requirements), and (4) surplus ar-

eas (provinces with sufficient production to be able to export to other provinces).

In terms of the levels of stocks, there are some variations across provinces.

For example, the province of Iloilo or the island of Mindanao can supply Metro

Manila and receive stocks within 7 days from stock withdrawal (from the ware-

house) to delivery to a receiving warehouse. In 1993, therefore, the maximum

emergency rice reserve was pegged at 7 days' consumption in very critical ar-

eas, and at 1 day's consumption in surplus areas.

However, the policy was changed during the 1995 rice crisis. The Legisla-

tive Executive Development Advisory Council ruled that NFA is to maintain

a 15-day emergency rice reserve at any given time. This ruling resulted in a

fourfold increase in the quantity of emergency rice reserve by province cate-

gory (Table 7.5). At present, the nationwide emergency rice reserve is placed at

340,000 tons (private plus public), based on the daily consumption of 22,000 tons.

How well does the emergency rice reserve work? There is no clear-cut an-

swer, but two points can be made. First, the way it operates, there is no means

of ascertaining the appropriateness of the rice reserve volume, nor is there any

way of judging the feasibility of the system. Rice stored in the warehouses is

not distinguished according to the type of reserve, mainly because of warehouse

space limitations. Building up the strategic rice reserve could take as much as

9 months before any releases into the market are made. For the most part of any

given year, stocks for the emergency rice reserve and the strategic rice reserve

are piled together in the same warehouse.

Second, NFA's response to emergencies does not differ significantly from

the emergency food assistance of other government agencies, such as the Na-

tional Disaster Coordinating Council (NDCC) and the Department of Social

Welfare Development. The NDCC—the agency that is primarily responsible for

consolidating the resources to mitigate the effects of calamities—is the first to

TABLE 7.5 National Food Authority emergency rice reserve, 1993 and 1995