The Foundation for Economic Freedom called for the deregulation of the rice trade to avert sudden price increases because of the alleged ineffective and inefficient practice of rice importation by the National Food Authority.
“We agree with Agriculture Secretary Emmanuel Piñol and secretaries before him that there are rice traders in the market who manipulate the price whenever the market becomes vulnerable. Private rice traders start delaying the release of their stocks hoping that another week’s wait can give them a few more millions of pesos in profit, inducing a shortage for the price to start rising,” FEF said.
“When other traders learn about it, some of them follow hoping to get more profits. If the DA Secretary does not check this herding behavior quickly, a rice price spiral happens at the expense of the poor,” the group said.
It said while some groups argued that the rice economy became vulnerable to price manipulation because of the new tax reform law and could encourage rice manipulators to exploit the situation, it was not the case this year since the year started with a very low stock ratio.
The average ratio in 2017 was only 10.3 percent. In years when the rice price is relatively stable, total NFA stocks are about 30 percent. In 2010, when the NFA warehouses were overly stocked with rice, the ratio averaged 52 percent.
NFA maintains rice stock for 30 days at the start of the three-month rice lean season of July to September, and for 15 days at any time for emergencies and natural calamities.