To ensure that government-subsidized rice will reach the poor, Philippine President Gloria Macapagal-Arroyo said Thursday she might order its removal from public markets and instead distribute the staple directly to depressed communities.
!!!insrt!!!"The NFA (National Food Authority) rice and the commercial rice are almost the same in quality so what happens is we have caught some NFA officials conniving with traders and they divert NFA rice supposedly for the poor to the commercial rice," said the President, adding that "that's why we are toying with the idea of stopping the release of NFA rice through public markets."
The government-subsidized rice will be released in the depressed communities "because the price differential of the subsidy has become too big," said the President, cited by Philippine Daily Inquirer in a report on its website.
The National Food Authority currently sells its subsidized rice at 18.25 pesos (0.44 U.S. dollars) per kilogram, while commercial rice is retailed at more than 30 pesos (0.72 dollars) in public markets and grocery stores.
Earlier, National Food Authority said it was considering raising the price of government-subsidized rice to help increase the income of rice farmers and reduce its huge losses.
"We can't keep prices too low because our farmers might be affected," said Jesus Navarro, administrator of the agency.
Navarro said the retail price of the subsidized rice should already be twice the price of unhusked rice, which it buys at (0. 41 dollars) 17 per kilogram.
The state-run food agency's losses have amounted to about 43 billion pesos (1.03 billion dollars) since 2003, according to the administrator.
"It is something that we are evaluating," said the agency chief, referring to the price increase. However, he declined to give a timetable for the implementation of the increase.
Poor Filipinos are already queuing for hours to buy subsidized rice to feed their families and raising its price would be a controversial move amid climbing costs for other basic commodities.
The prices of rice have hit record levels on the international market amid tight global supplies.
Unless the government take measures to close the gap in the prices of government-subsidized rice and commercial rice, riots in the streets could break out, House Representative Edno Joson warned said.
While there is no rice shortage, the government could face a serious problem because of the "big disparity" in the selling prices of government-subsidized rice and commercial rice, Joson said.
"If we run out of the NFA rice prematurely, there will be long queues, and there will be panic buying," the lawmaker said.
Consumers have no choice but to buy commercial rice if the government stock is depleted, said Joson, who served as NFA administrator before.
Jacques Diouf, director general of the Food and Agriculture Organization, on Wednesday said that high food prices and shortages would continue in the near term, making some poorer countries vulnerable to food riots.
The Philippines, one of the world's biggest importers of rice, is struggling to source supply as exporting countries clamp down on shipments to curb inflation and traders hoard the grain.
The country has pulled out all the stops in trying to source more supply of rice, including asking Asian governments to secure supplies. It has also lifted the rice import quota of the private sector.
A Swiss-based investment bank said the fiscal cost of importing rice at a high price and selling it at the current subsidized price could approach one percent of its gross domestic product in 2008.
