Solon opposes full privatization of rice importation

February 23, 2011 11:58 pm 

By Llybeth G. Ison

MANILA, Feb. 23 — A party-list lawmaker on Wednesday expressed opposition to transfer the task of rice importation from the National Food Authority (NFA) to the private sector, as this would have negative effect on the country's rice farmers.

"Private sector importation of rice is good on paper but in practice, it will be disastrous for nine million Filipinos who are directly and indirectly into rice farming," said Kasangga party-list Rep. Teodorico Haresco.

"This sub-sector have suffered deteriorating incomes due to lack of infrastructure to market, inadequate access to micro-credit, lack of market information, and even natural disasters that cripple their farms twice or even thrice a year," he lamented.

The Department of Finance (DoF) earlier said it would already stop the NFA from importing rice and completely transfer this task to the private sector.

The plan is part of the ongoing reforms of the government to help address the money-losing operations of the NFA, it said.

Haresco said that apart from the fact that the plan to fully privatize rice importation would devastate farmers, "it is also a known fact that even during the time when the government would only give the private sector some allocations to import rice, they always abuse this privilege by importing more than what was allocated for them. This is aggravated by the fact that some of the country's rice traders are also rice smugglers themselves."

"Our farmers are barely surviving because even up to now, the government cannot stop massive rice smuggling and I'm certain that once we completely transfer the authority to import rice to the private sector, our country will be flooded with cheap smuggled rice while the produce of our rice farmers are left to rot. This plan is absolutely a bad idea and ill-advised," he said.

Lawmakers earlier filed bills for the restructuring and streamlining of the NFA.

In filing House Bill no. 160 or "The National Food Authority Act of 2010," Bohol Rep. Arthur Yap said the proposed measure is in support of the programs mentioned by President Benigno S. Aquino III in his inaugural speech — food sufficiency and to increase farmer's incomes.

"This measure is in support of rice self-sufficiency. If NFA can be re-organized to concentrate on buffer stocking and selling rice at close to market determined prices, then NFA's losses will significantly decrease and prices of rice will stay firm to the benefit of farmers' incomes," he said.

HB 160 also endeavors to clarify the NFA operational mandates by redefining its main mandate as maintaining a buffer stock; allow realistic and market oriented pricing mechanism; redefine market areas wherein it can intervene; redefine and clarify its role in the development of the grains industry; and to enable it to act as a marketing service provider for purposes of farm and market stabilization.

Through this measure, Yap said, the NFA shall become "an effective tool in ensuring food security for all Filipinos. It would become more successful in stabilizing both the supply and prices of food grains. This would also carry out regulatory and developmental functions to support farmers to increase their productivity and profitability."

"The bill would rationalize NFA's mandates and making its programs less market distortive. As such, this will reduce losses and allow farmers greater motivation as rice prices will now be truly reflective of correct costs and values," he noted.

"The NFA can ensure consumer’s accessibility to affordability and availability of food grains, especially during times of calamities," he assured.

For his part, Quirino Rep. Dakila Carlo Cua filed HB 1528 that seeks to provide rice and other basic commodities for pro-poor programs of the Department of Social Welfare and Development (DSWD).

"The measure is pursuant to the declared policy of the State to ensure food security for all Filipinos, adequate supply of food grains at all times and in all places, and reasonable levels of prices of food grains and to carry out regulatory and developmental functions to support farmers and grains businessmen so as to increase their productivity and profitability," he said.

Under the bill, the NFA shall be attached to the Department of Agriculture (DA) and cannot be abolished or privatized without the approval of Congress.

The bill provides that the corporate powers and functions of the Authority shall be vested in and exercised by a Board of Directors which shall be chaired by the Secretary of the Department of Agriculture. Likewise, a representative from the business sector and the farmers shall seat in the Board.

The NFA shall start on a clean slate basis and shall transfer all its loans and its non-core program assets to an NFA Board of Liquidators (NFA-BOL) which shall handle the disposition and liquidation of the transferred assets and liabilities, it said.

Under the measure, the NFA shall have a total authorized capitalization initially in the form of existing assets amounting to P20 billion, the balance of which shall be provided in the form of equity contribution thru the General Appropriations Act (GAA).

The bill also pushes the government, through the Department of Budget and Management (DBM), to include in the annual President's budget proposal, funds to be utilized for personal services, interest and other maintenance and operating expenses to maintain its food security buffer stock.

Furthermore, the Authority shall provide for a continuing separation package for its officers and employees who choose to leave or retire from the government service.

Meanwhile, LPGMA party-list Rep. Arnel Ty is pushing for consumer group representation on the governing board of the NFA.

"We need consumer representation in the NFA council. If farmers can have a representative in the council, surely consumers can also have a representative," he said.

At present, the NFA council has nine members — DoF Secretary, the Governor of the Bangko Sentral ng Pilipinas (BSP), a representative of the President; a representative of the farming sector; and the heads of the Land Bank of the Philippines (LBP), Development Bank of the Philippines (DBP), and the Philippine National Bank (PNB).

The DA Secretary and the NFA administrator serve as council chairman and vice chairman, respectively.

Established by a Marcos-era decree, the NFA is mandated to ensure security in the country's supply of grains, particularly rice.

It carries out several strategies, including buffer stocking, processing activities, the procurement of paddy from farmers, the dispersal of paddy and milled rice to key locations, and the distribution of the grain to marketing outlets at appropriate times, such as during natural or man-made calamities or emergencies.

The agency also stabilizes the production and supply of rice by buying the grain at farm-gate prices that allow farmers to earn a profit, and then turning around to sell the grain at affordable wholesale and retail prices.

Because of its mandate, the NFA incurred financial losses which had ballooned to more than P120 billion over the years. (PNA)

DCT/LGI

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