Villar said that in filing Senate Bill 1897, he wants the "exclusivity clause" that authorizes only the NFA to import rice to be repealed.

"Attended by allegations of corruption, the system no longer works and has to be reformed to include other sectors of society," Villar said.

Sen. Francis Escudero, chairman of the Senate Ways and Means Committee, said that if rice which costs P29.40 per kilo to import will continue to be sold through NFA retailers at P18.50 per kilo, the subsidy will reach a total of P21.7 billion.

This is the "political premium" the Arroyo administration will have to pay to prevent the shortage of rice, which is the main food of 90 million Filipinos, from "exploding into a crisis fatal to an already faltering government," Escudero said.

Villar also said the looming rice crisis brings to the fore reforms that have to be implemented in the agriculture sector and this includes the system of giving the NFA the sole responsibility to import rice into the country.

"The authority of importing rice should be given to farmer cooperatives and organizations as a way to increase their income," Villar said.

He noted that the farming sector has always been at the receiving end and this tends to dampen or lower the price of palay (rice) resulting in no or low income for Filipino farmers.

"If their collective organization is given the privilege of doing rice importation, they are given an opportunity to earn additional income," he said.

The measure also proposes that NFA funds be used only to purchase locally produced palay or farmer imports for food security requirements of the country. It also mandates NFA to use its funds to acquire locally-produced rice from local farming community to motivate farmers to be productive.

"The government keeps on harping on economic growth. This measure intends to bring the benefits of economic gains directly to the people and make these government pronouncements believable. This will instill reform to the neglected agricultural sector where still a majority of Filipinos belong," he said.

Escudero explained that if imported rice cost $ 707 per metric ton, the amount government paid for the 335,000 metric tons of rice it bought this month, then the 2 million metric tons government plans to bring in this year will cost P58.7 billion, based on a P41.50 to $ 1 exchange rate.

"Of this amount, only P37 billion can be recouped, assuming completely zero trading, storage, and transport losses," he said.

Escudero further estimated that the R58.7 billion required to import rice is equivalent to the government’s collection from the Value-Added Tax (VAT) on fuel this year, which is bigger than the budget of the military and the police and five times the allocation for the Department of Health.

"Taxes collected on the gas pump will just be swapped for rice. The rise in the world prices of rice, which translates into bigger corporate subsidy for the NFA, was never factored in this year’s expenditures," Escudero said. As a consequence, the plan to have a balanced budget this year is in peril, he said.

"It’s either a balanced budget or a balanced diet. In this clash of policies, I predict the ‘politics of the stomach’ to win hands down," he said.

The National Food Authority (NFA) appealed yesterday to the public not to go into panic-buying, assuring it has ample supply of rice to meet the country’s need in the next few months.

The NFA also appealed to the people to stop speculation on rice shortage.

Rex Estoperez, NFA spokesperson, said the speculation on alleged massive rice shortage is only surging the price of rice in the market.

"We have ample supply. There is no need to panic," said Estoperez during the Fernandina Forum in Club Filipino in Greenhills, San Juan City.

Estoperez pointed out that the high price of rice in the market is a result of tight of supply of rice worldwide.

"We limit our stocks because globally we have tight supply of rice kaya lahat mahal, it’s only a chain reaction," said Estoperez.

He noted that the country will import rice from other Asian countries to beef up stockpiles and guarantee enough supply of rice.

"We import because we need their rice to fill the requirements, buffer stock and food security," he said.

The NFA is now storing a 30-day buffer rice stock in time for the start of the lean season which will start in July.

Meanwhile, Estoperez said they are now dealing with the passbooks of 22,000 retailers of NFA following the orders of President Arroyo for new and tougher accreditation review of their licenses, saying, "we want a clean slate, mag-issue kami ng panibagong passbook… we have to revalidate them."

Earlier, President Arroyo ordered the cancellation of their licenses to weed out those involved in the diversion of government rice to the commercial market as part of the intensified crackdown on rice hoarders.

The President wanted the issuance of new permits or "NFA passbooks" to qualified merchants who will properly sell rice subsidies intended for the poor at P18.25 per kilo. (Anna Liza T. Villas)

CLARK SPECIAL ECONOMIC ZONE, Pampanga — Manila and Hanoi have signed an accord that would permit the country to import up to 1.5 million metric tons of Vietnamese white rice, even as earlier reports said Vietnam would limit its exports to only 3.5 million MTs in the next 10 months.

Agriculture Secretary Arthur Yap said the Vietnamese commitment would lead to an increase in the stockpile of the cereal in addition to the increase of the US credit commodity loan to $ 75 million from the usual annual $ 20 million, which means another 100,000 MT of US rice at $ 750 per metric ton.

The signing of the RP-Vietnam Memorandum of Agreement (MoA) by Yap and Vietnamese Industry and Trade Minister Yu Huy Hoang was made on the sidelines here of the two-day, 2008 Philippine Development Forum, which ends today.

President Arroyo, Trade Secretary Peter Favila, and Finance Secretary Margarito Teves witnessed the exchange of notes between the Philippines and Vietnam concerning the rice supply accord.

This Manila-Hanoi pact states that the "Vietnamese government agrees to sell, unless under circumstances of natural disaster and harvest loss, and the Philippines agrees to buy, up to 1,500,000 metric tons of Vietnamese white rice annually for starting year 2008, subject to market and production conditions and to terms allowable under applicable laws of both countries."

Vietnam reportedly suffered from black bug infestation that threatened to reduce rice harvests, compelling authorities to reduce exports.

Thailand is also reducing its exports to maintain its food security.

The Vietnam Southern Food Corp. and the National Food Authority (NFA) will implement the terms of the MoA, which will be in effect for three years and automatically renewed for another three years, unless terminated by either of the parties through diplomatic channels six months before the intended date of termination. (Marvyn Benaning)

Sen. Loren Legarda said yesterday that a more aggressive irrigation and farm-support program is needed if the Philippines is to achieve 100 percent rice sufficiency from local production.

Legarda said that while the government reported a 5.96 percent increase in total rice production in 2007 to reach 16.24 million metric tons (MT), the output could have been better if not for the adverse impact of climate change during the second and third quarters of last year.

"IRRI (the International Rice Research Institute) has reported that the Philippines is one of two countries in Asia whose rice productions are most affected by the El Niño phenomenon. This need not be the case if only all of our farmlands are irrigated and not dependent on rainfall," said Legarda.

With the effects of climate change worsening every year, Legarda stressed the government must aggressively pursue global-warming-mitigation activities, especially against drought.

"The government is targeting palay production of 17.155 million metric tons for 2008. But that production target would only cover 92.8 percent of our total rice consumption needs," she said. "We must target 100 percent rice sufficiency, something which we achieved in the 1980s."

"If we continue to import 10 percent of our rice needs, there will always be this fear, grounded on reality or not, that there may not be enough rice for all of the now 91 million Filipinos," she said.

"Importing also makes us vulnerable to price manipulations, depletes our foreign currency reserves or adds up to our foreign debts," she stressed.

Due to the rising cost of palay, there is a strong possibility that the price of rice will increase in the coming weeks, rice retailers, farmers, and leaders said at the weekly "Meet the Press" forum of the National Press Club of the Philippines.

The farmers and leaders based their prediction on the increasing costs of rice production due to skyrocketing costs of fertilizers and scarcity of seedlings being supplied by government to rice producers.

"Sa ngayon ang palay ay tumaas na mula sa dating R11 sa R14.50 kaya’t hindi maiiwasang tumaas ang bigas hanggang sa R32 bawat kilo," said Arsenio Nicolas, a rice retailer from San Rafael, Bulacan, during the NPC forum.

Nicolas was joined in the forum aired at NBN Channel 4 by Butil party-list representative Leonila Chavez, San Miguel, Bulacan Councilwoman Josie Buan and Cabanatuan, Nueva Ecija, farmer Eduardo Policarpio.

Chavez called on the public to avoid panic-buying because there have been assurances from the agricultural sector of ample supplies of rice despite the shortage being projected by some people.

"This is a wake up call for us," Chavez said.

Chavez has been involved in farmers’ cause since the 1970s when the government launched Masagana 99 through the initiative of then Agriculture Secretary Arturo Tanco Jr.

Buan and Policarpio were one in their appeal that government should intensify its support to farmers since this sector plays an important role in the country’s economy because it is on their shoulders that food supply is ensured for millions of Filipinos. (Roy C. Mabasa)

Farmers and civil society groups warn that the worst situation in the country’s rice supply is yet to come as they predict the prices of rice will soar to as high as R40 during the lean months of July to September.

"Reports of tightening global supply of rice have pushed local prices in the market of the country’s staple food, abnormally high even as the harvest season is still headed for its peak this coming April," said Jessica Reyes-Cantos, Rice Watch and Action Network Lead Convenor.

In a press conference in Quezon City, the farmers predicted that based on their estimates, the expected production output this harvest season is 1.9 million metric tons that will last for almost two months.

"The price of rice is expected to go up to as high as R40 by July as the traders will definitely take advantage of the limited supply while the government will be dependent on the imported rice for its buffer stock," said Jimmy Tadeo, chairperson of the National Rice Farmers Council.

The farmers reported that the traders’ buying price of palay at present ranges from R12 to 16 per kilo while the National Food Authority is still pegged at R10 per kilo.

"With this lopsided participation of NFA, we will not be surprised if the traders who bring the rice to the market are able to command the prices of this basic commodity and will be able to set the prices when the supply further tightens in July to September," said Trinidad Domingo, chairperson of the Pambansang Koalisyon ng Kababaihan sa Kanayunan (PKKK) and a rice farmer from Nueva Ecija.

The farmers computed the expected rice supply this harvest season based on the 868,509 hectares of irrigated land that will be delivering the produce this April. Only the irrigated areas were able to plant late last year up to early this year while the rain-fed areas or the rice lands without irrigation are expected to harvest only around October or November.

According to Tadeo, the national average yield is only 3.5 tons per hectare which will result to around 3 million metric tons of palay output. The milling of palay has only 65% recovery that will lead to 1.9 million metric tons of rice output for the period. According to government figures, the daily consumption of rice is pegged at 33,000 tons.

"Higher buying price of palay will give temporary relief to farmers as they will be able to bring home bigger income. However, they will be forced to buy rice during the lean months of July to September and may not be able to contend with the very high prices of rice," said Domingo.