By Danilo P. Padua, PhD
This is an article by Fermin D. Adriano (Manila Times, Aug 8, 2025). Shortened for this paper. I have a contrary opinion from that of the writer as regards RTL, but it would be nice to go over it.
DA Sec Francisco Tiu Laurel Jr. recently declared that without amendments, the Rice Tariffication Law (RTL) “as it is written today will kill our rice industry.”
Passed in February 2019, Republic Act (RA) 11203 removed the authority of the National Food Authority (NFA) to import and engage in rice trading. The law further provided that rice importation should now be in the hands of the private sector with the NFA’s mandate confined to maintaining a buffer stock for emergency purposes. That buffer, the RTL stipulated, should be bought from local farmers.
The law was recently amended by RA 12078, passed in December 2024, which among others authorized the NFA to dispose of inventories in various ways, empowered the Bureau of Plant Industry to maintain a database of existing rice stocks and physically inspect warehouses to determine actual volumes, and allowed the Agric. Sec. to import rice to stabilize supply and prices upon the declaration of a “food security emergency.”
The demand to further amend RTL is based on the observation that the liberalization of rice trading resulted in a flood of cheap imports. This in turn adversely affected our rice farmers, because imports, according to Laurel, “is eating market share” of local farmers. He warned that it “could force even local millers to close shop and just go into rice importation.”
In support of this perspective is House Speaker Martin Romualdez, who has filed House Bill 1 or the RICE (Rice Industry and Consumer Empowerment) Act. The bill seeks “to restore NFA’s regulatory powers, authorize the DA (Department of Agriculture) to limit imports during harvest seasons, and allow the government to set a floor price for palay.”
The RTL is being blamed for the flood of cheap rice imports and the plunge in palay prices. Funny, because a year ago, it was being blamed for rising prices. The culprit, as detractors of the law claim, is that it removed the monopoly power of the NFA to import rice and to engage in rice trading in favor of import liberalization.
Let me dissect their arguments using robust empirical data.
One, the NFA was not effective in its price stabilization function because it was not able to build enough stocks to really influence market prices. Regular milled rice in the country was priced 65 percent higher than the world market price. More serious is the fact that its operations never benefited the poorest of the poor due to flawed distribution operations. It was the relatively well-off that had access to cheap NFA rice.
Two, it was never successful in propping up palay prices received by farmers. The main reason was that it could only purchase at most 4 percent of the total harvest, with the average at 2 percent.
Three, because the NFA operated under the principle of “buy high [from the palay farmers] and sell low [to consumers],” this bloated the agency’s debts to as high as P170 billion. The government had to shoulder payments it as it had extended sovereign guarantees.
Four, despite the having the authority and billions received yearly, it did not prevent the emergence of a rice crisis in 1995, 2008-2009 and 2018.
Five, the NFA’s operations were attended by graft and corruption. Commissions could be received from the purchase of imports all the way down to logistics contracts (shipping, stevedoring, bagging, trucking, transport, fumigation, etc.) to bring rice from the source to NFA warehouses and distribute this to various outlets.
Assuming that the RICE Act is enacted, which practically means resurrecting the old NFA, a vital question its proponents should answer is this: How can they ensure that the shenanigans attendant to past NFA operations will not happen again? Are they under the illusion that restoring the old NFA will automatically solve all the problems enumerated above?
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