THE National Food Authority (NFA) should not have regulatory powers and be reduced to a logistics agency instead, its former administrator said.
In a presentation at the Annual Rice Forum held at the Philippine Council for Agriculture, Aquatic and Natural Resources Research and Development of the Department of Science and Technology (DOST-PCAARRD) in Los Baños, Laguna, former NFA Administrator Romeo G. David said: “The re-engineered NFA as a logistics corporation is competent to handle other commodities aside from rice and corn and can therefore better serve the countryside as a versatile anchor facility conveniently linking producers to markets. It can consolidate the produce of small farmers and then find or link institutional buyers for their production.”
Mr. David served as NFA Administrator during the term of President Fidel V. Ramos.
According to Mr. David, when the NFA becomes a logistics agency, it can maximize the use of its main assets such as its manpower, warehouse facilities, administrative and regional offices, independent communication system, fleet of vehicles and processing facilities.
“The sheer size of the present NFA organization affords it to offer services to the intended beneficiaries at cost efficiency which are not readily available from any sector in the grains industry. Access to the re-engineered agency’s facilities would give unprecedented convenience and advantage to the rural folk especially the farmers in terms of value-added potential to their produce without the burden of ownership of these facilities, unlocking their economic potential,” Mr. David said.
Mr. David noted that with the re-engineering, the NFA can provide the missing link to rural growth, bringing producers and consumers together by providing strategic logistics services.
“The national government through the NFA facilities (as a logistics agency) will continue to maintain adequate stocks of food commodities strategically positioned in all provinces and hard-to-reach localities, and the mobility in communications network allows immediate market feedback especially during calamities. Immediate response to calamity-stricken areas and the provision of food relief are assured by the strategic positioning of stocks and continuous monitoring of the supply situation,” according to Mr. David.
In an interview with reporters on the sidelines of the forum, Mr. David said that the NFA should not have any licensing authority as this is a responsibility of the Department of Trade and Industry (DTI), while production of agricultural goods is a responsibility of the Department of Agriculture (DA).
“The NFA is structured both in assets and manpower but it is also saddled with a lot of expenses and activities that are not germane to the office. So I’m saying, devolve it to the right offices. Example, licensing, give it to DTI. Production, that’s the role of DA. Why saddle the NFA with that?” Mr. David explained.
He also said that the Department of Social Welfare and Development (DSWD) can decide where the food stocks of NFA should go.
“NFA just provides the service. If you want to import, we [NFA] will help you import. It is not NFA money so we have no say. They hold inventory. If the government wants to give the rice away, it is the government’s decision. DSWD can decide who it goes to.,” Mr. David said.
A rice tariffication bill has been filed in the Senate, and the provisions include the removal of the import-licensing powers of the NFA as rice would be imported freely while the government would charge tariffs on the shipments.
In an interview with BusinessWorld last month, NFA Spokesperson Angel G. Imperial said that the agency disagrees with the proposal.
“The licensing power should be there because one function of the NFA is to regulate,” Mr. Imperial said.
Mr. David, on the other hand, said that he supports rice tariffication but there has to be a window for importation.
“Open import has to be on window. When the harvest is in, which the government can declare, then they can import. You as an importer know those dates. It’s transparent. If you import earlier or later, automatically, the shipment will be confiscated and becomes government stock,” Mr. David said.
He also said that he thinks that the NFA should increase its holding capacity to 3 million metric tons (MT) from the current 2 million MT.
“You have to have more than enough to supply the demand and overwhelm market consumption,” Mr. David said.
Mr. David also said that the government should absorb the debt of the NFA to give the agency a clean slate.
“The whole debt of NFA has to be absorbed by the government so NFA starts with a clean slate. It has hard assets and its working capital can come from divestment or sale of assets they are not using,” according to Mr. David. — Reicelene Joy N. Ignacio
