Ex-technocrats join call for abolition of NFA
THE Foundation for Economic Freedom said on Thursday that it is throwing its support behind Senators Cynthia A. Villar and Sherwin T. Gatchalian, who have called for the abolition of the National Food Authority.
In a statement, the FEF, whose members include prominent former economic ministers, said that the “NFA has caused and aggravated rice inflation and rice shortages in several regions, compounded the debt and losses of the national government, and provided opportunities for graft and corruption for its officers and employees, from the purchase of imported rice to the distribution and transportation of subsidized rice.”
According to the FEF, which tends to support free-market economic policies, food security does not depend on the existence of the NFA, and a smaller agency can be created to manage and maintain buffer stocks of rice to prevent shortages that raise prices.
“[T]he NFA has been inefficient and clueless on the right timing for importing rice and its distribution. The private sector should be free to import rice from any source in whatever quantities the market needs. This is the only solution to the current rice shortage crisis and to the pervasive malnutrition caused by high food prices,” the FEF said.
The FEF called for the immediate passage of the rice tariffication bill by the House of Representatives and in the Senate.
“We support a version of the bill that will abolish the National Food Authority and its powers, including imposing import quotas on the private sector in the importation of rice and licensing traders and importers,” FEF said.
The NFA has said that it used its funds to repay maturing loans and avoid paying higher interest rates, limiting its ability to purchase rice from farmers.
“Our funds are committed to paying off maturing loans,” NFA Spokesperson Rex C. Estoperez said in a phone interview.
“The funds are all accounted for,” Mr. Estoperez added, adding that heavier interest payments would affect the financial capacity of the NFA if these are not paid.
Meanwhile, in a chance interview on the sidelines of the 14th Agriculture and Fisheries Technology Forum and Product Exhibition in Mandaluong, Ms. Villar said that the NFA should not have used the funds to repay debt but to maintain buffer stocks to prevent supply problems, particularly in the supply of low-cost rice, which poor families depend on.
“The NFA was given a P7-billion budget and they did not buy from farmers,” Ms. Villar said.
“Those funds were not intended for paying down debt, they should have used it for buffer stock to enable the agency to sell low-cost rice and keep traders from controlling the supply of rice,” Ms. Villar added.
Ms. Villar, who chairs the Senate’s committee on agriculture and food, apologized for the rising price of rice.
“I think we have failed in our job to serve our fellow Filipinos. I am apologizing on behalf of the Department of Agriculture, the National Food Authority and the Department of Trade and Industry for failing to control the spiraling price of rice,” Ms. Villar said in her speech during the forum.
In a statement, the NFA said some local shortages were beyond its control.
“The rice crisis in Zamboanga happened not because of NFA’s inefficiency or incompetence. It was due to the significant depletion of commercial rice stocks; the unavailability of commercial rice sources due to the closure of the Malaysian border which led to the sudden price surge; and the declaration of a State of Calamity in Zamboanga City to allow the local government to control rice prices and purchase buffer stocks using calamity funds,” NFA said.
“We are open for scrutiny anytime. Those who want to verify what we have been doing can check our records, go around the country and ask the people. For the first time in many years, indigenous peoples, small farmers, fisherfolk, island dwellers, the urban poor, those living in resettlement areas — the real marginalized sectors of our society — are happy and thankful that they have access to quality, low-priced NFA rice,” it added.
NFA also said it received P5.1 billion in subsidies from the Department of Budget and Management (DBM) based on a Notice of Cash Allocation issued on Feb. 24, 2017. Of the total, the Bureau of Treasury (BTr) automatically deducted 10% or P510 million as payment for previous years’ guarantee fees while P2.5-billion represented its annual contribution to servicing the P8 billion worth of 10-year Treasury Bonds issued to finance the NFA in February 2008.
The agency said that it received on March 1, 2017 net proceeds of P2.09-billion.
“The 2.09 billion net subsidy was used to pay for importation and palay procurement, which is in accordance with the General Appropriations Act. In fact, the subsidy fell short as NFA’s total cost of importation in 2017 amounted to P5.2 billion pesos,” NFA added.