Economist calls for abolishing NFA

MANILA, Philippines - An economics professor from the University of the Philippines has called for the dismantling of the National Food Authority (NFA) for having failed to do its job.

The call was made by Dr. Ramon Clarete on the last day of the consultations called by the Senate as inputs for the legislative reform agenda of the 15th Congress. 

Clarete presented to his audience of legislative staff the “shocking” facts and figures showing how the NFA has been a miserable failure in selling cheap rice to the poor while losing billions of pesos of tax money for its practice of “buying high and selling low”.

What’s wrong with NFA, Clarete argued, is that, since the reign of President Cory Aquino, it has claimed an increasing amount of public funds in the name of food security. This policy is proving to be very expensive.

“There is a need to revamp the policy on food security and this should not include NFA as we know it now,Clarete pointed out.”

In its selling operations, the state company has only benefited 25 percent of the poor while the non-poor who cornered cheap, NFA rice made up 48 percent. Besides, he revealed that as high as 68 percent of cheap NFA rice were leaked elsewhere in urban areas.

Pilferage of NFA rice in the cities is high, Clarete reiterated, because the subsidized government rice is diverted and sold as commercial rice by private traders.

The economics professor also arrived at the conclusion that the government spends P2 to deliver every kilo of cheap rice to the poor. In its rice importation operations which it heavily did since 2007, the state has been losing an average of P2.47 per kilo of imported rice.

As a result of heavy losses, the NFA is seen to have accumulated P136.6 billion in debts before the end of this year. This, he said, is a big drain on scarce government funds.

The economics professor, who has been known to be familiar with the country’s mistaken policies on agriculture, also recommended that NFA could not continue to be the referee and main player in the rice industry.

He suggested that the regulatory functions of NFA be taken over by another agency. Its social functions, that of distributing subsidized rice to the poor, he added, must be turned over to the DSWD. Its monopoly of importing rice must be stopped.

It is best for everyone that NFA will just be a state rice trading company, he concluded.