Despite calls for the abolition of the National Food Authority (NFA) in light of surging rice prices, House Appropriations Committee Chair Rep. Karlo “Ang Probinsyano” Nograles on Monday said the grains agency should be retained even if a rice tariffication measure is passed, as the NFA is necessary to ensure the continued sale of affordable NFA rice as well as “rice security,” or ready supplies and stable prices of the food staple.
The third-term congressman from Davao said the interventions currently being undertaken by the NFA to tame rice prices would still be necessary even if the government lifted limits on the quantities of rice the private sector could import.
“Right now the NFA has been directed to increase its participation in the market to provide the public with affordable rice as well as discourage unscrupulous rice traders from hoarding their stocks,” said Nograles.
Malacañang through Memorandum Order 28 signed on September 21 by Executive Secretary Salvador Medialdea directed the NFA to immediately release to the market approximately 230,000 metric tons (MT) of rice currently available in its warehouses. The NFA now releases 128,000 bags of rice to the market in a bid to temper rice prices.
“If the NFA were to be abolished, what agency would perform this function? Lifting quantitative restrictions will allow the private sector to import as much rice as the market demands, and in theory competition is supposed to lead to lower prices, but there are no guarantees they will not collude and set prices,” explained the legislator from Davao.
“Lifting quantitative restrictions will allow the private sector to import as much rice as the market demands.”
“The NFA would provide a contingency in case that happens.”
According to Nograles, the NFA should be allowed to focus on buffer stocking as well as the procurement of palay from local farmers.
The NFA is mandated to maintain a 15-day buffer stock during non-lean months, and a 30-day buffer stock during lean months.
Nograles said that “the NFA’s inability to perform this mandate is a failure of its leadership, not a failure of the agency.”
“The NFA’s inability to perform this mandate is a failure of its leadership, not a failure of the agency.”
The solon from Mindanao said he agreed with economists who believe the NFA should be “repurposed” and not abolished.
University of the Philippines economics professor and former Socioeconomic Planning Secretary Cielito Habito stressed at a forum organized by the Management Association of the Philippines that the NFA must focus on maintaining the country’s rice inventory.
“The NFA should not be abolished but repurposed. It must be confined to buffer stocking while rice assistance for the poor can be handled by the DSWD (Department of Social Welfare and Development),” Habito said.
