PNFSP Statement on DAs transfer of NFA stocks to LGUs

The Philippine Network of Food Security Programmes cites several potential issues with the National Food Authority (NFA) rice stocks being released to local government units (LGUs) in its aim to  lower rice prices. For one, NFA's rice reserves are not large enough to significantly influence market prices. If LGUs rely solely on these stocks, it may not be enough to counteract rising prices in the broader market. Private traders and retailers may manipulate supply in response, keeping prices high despite NFA intervention.

There are risks of misallocation or hoarding when LGUs handle rice distribution. Some reports suggest that certain officials or traders divert subsidized rice to private markets for profit. Cases of  favoritism in distribution is also a common problem, with only those “mas malapit sa kusina” gaining access to the staple, and therefore  preventing the rice from reaching those who need it most.

The transfer  to LGUs could pose to a lot of logistical challenges. Transporting and distributing rice from NFA warehouses to LGUs requires proper handling and storage, which some local governments may lack. Delays in distribution  and with no proper storage can lead to spoilage and pests and molds infestations, making them even more undesirable to consumers.

Most of all if cheap NFA rice floods the market, it could discourage local farmers from selling their produce at competitive prices, potentially harming domestic rice production.

We support  measures to stabilize rice prices, as we call on the government  to institute urgent and decisive solutions to  ensure sustainable rice production.

On top of the agenda should be to strengthen support for local farmers through increased subsidies for rice producers, improved irrigation infrastructure, and promotion of sustainable agricultural practices to boost productivity and reduce production costs.

Implementation of  strict measures must be done against hoarders and price manipulators who exploit supply shortages for financial gain. A review and reform of rice importation policies must be done as while rice imports may serve as an immediate buffer against short term shortages, over-reliance on imported rice undermines national food security. Lastly, with the increasing frequency of extreme weather events, stronger climate adaptation strategies, including the promotion of climate-resilient  rice varieties, enhanced disaster risk reduction programs, and support for smallholder farmers in climate-vulnerable areas must be put in place.

Ensuring affordable, accessible, and locally produced rice must remain a national priority. A comprehensive and people-centered approach is necessary to break the cycle of recurring rice crises in the country.

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