NFA's challenge

As population grows and those who feel the pains of poverty increasing, the role of National Food Authority (NFA) and how it meets the new challenges becomes more critical.

For instance, understanding the politics of rice trade between major rice producing countries of the world and countries that are highly dependent on rice as their staple (like the Philippines) is one of the more important responsibility of the NFA.

NFA transformation

Of course, the bigger role of this quasi-government agency does not only pertain to rice supplies, but even the country’s food security. The NFA, whose roots can be traced back to 1972, has transformed so many times.

During the recent years, it has realized the need to adapt to a global environment and at the same time looking at a sustainable approach to its operations.

Other than looking at options to restructure, streamline and even privatize certain activities, the NFA’s greatest challenge should be to make sure that people’s money is put to proper use. This means not only buying rice and grains at the most cost-effective price, but also making sure the distribution channels are kept open and flowing.

One of the biggest criticisms that past NFA administrations have faced is the sight of bodegas full of rotting grains that have not been sold to the public in time.

NFA responds to reader’s letter

This column received a letter from no less than National Food Authority administrator Lito Banayo who has so far been doing a splendid job without too much fanfare of balancing our rice importations with the global supply and pricing intricacies.

Following is the letter he sent commenting on our “rice watchman” Manuel Bondad’s letter that was printed in a previous column. Read on.

“I thank you and Mr. Manuel Bondad for your insights into rice trading, as published in your column yesterday.

“The Reuters report of March 28 was as much a puzzle to me when it first appeared. The truth is, the NFA Council approved a total of 500,000 metric tons of rice imports for this year on the basis of the assurances of the Department of Agriculture that the summer harvest (ongoing) will beat last year’s production.

“The DA originally wanted this to be entirely for the private sector, but the Council decided on its March 29 meeting to increase NFA’s buffer stock by 120,000 tons, to be deducted from the half-a-million import limit.

“We have successfully bid out the private sector imports for 2012, the total service fee of which earned for NFA a total of P2.64 billion (P1.164 billion for the open portion of 190,000 metric tons, and P1.478 billion for the farmer organization portion of 190,000 tons).

“The open and transparent bidding process elicited unexpectedly high bids, from a record number of participants (379 bidders in all).

Higher service fee income

“Last year (2011), we bid out a total of 660,000 metric tons, and earned service fees amounting to P1.53 billion.

“In 2010, when the NFA (under the previous dispensation) awarded import permits for 220,000 metric tons, it earned a service fee of P110 million. Parenthetically, that was the same year when NFA, for its own inventory, bought 2.25 million metric tons, at the average price of $642, as Mr. Bondad correctly pointed out.

“In terms of income for government, in the first two years of the Aquino government, we proved that openness and transparency produces higher revenues, in weighted terms, by 464 percent (2011), and 1,354 percent (2012) as compared to the fixed service fee imposed on importers chosen by “first-come, first-served method.”

“The 2.25 million tons imported by NFA in 2010 for its own account cost government a total of $1.44 billion or P63 billion. In 2011, as Mr. Bondad approvingly wrote, we bought just 200,000 tons at $480 per ton, or $96 million or P4.2 billion, at the same payment and shipping terms as in 2010. 

No funny deals, no funny agents

“We designated an internationally recognized surveyor to inspect our imports, and the biggest and most reputable shipping agent in the country, to handle our imported rice. No funny deals; no funny agents.

“Last year, we successfully got our government to sign a supply agreement with Thailand, and worked hard to open our doors likewise to Cambodia. We had hoped the agreement would be signed when President Aquino, along with Sec. Alcala, went to Phnom Penh last April 3. 

“We hope the same could be signed soonest so that we could ask three, instead of one country, to offer the best price and terms for our much-decreased volume of 120,000 tons this year, since the stocks should arrive in Philippine ports by June 30, a window that is fast narrowing.

More transparency

“We welcome greater interest in the intricacies of rice trading, and your article, based on Mr. Bondad’s keen monitoring, continues to be guideposts in our aim to contribute towards rationalizing the management of our most basic food staple.

“It is not easy, and the task is not helped by those who, unlike you, are unfamiliar with commodity trading practices yet demand simplistic solutions. As a retired executive of one of the world’s largest oil companies, you know commodities trading both international as well as domestic.”

FilOil Flying V Pre-Season tournament

Two teams are emerging as early favorites to capture this year’s FilOil Flying V Pre-Season championship. Still undefeated and already in the quarterfinals are the NCAA defending champion, San Beda Red Lions, under new coach Ronnie Magsanoc, a former marquee player of the defunct Shell PBA team.

Joining San Beda in the quarterfinals is the surging National University Bulldogs coached by Eric Altamirano. Led by Bobby Ray Parks, son of another former Shell player Bobby Parks, the Bulldogs have been winning handily over their NCAA and UAAP rivals.

Watch the coming exciting games at FilOil Flying V Arena, San Juan, as teams scramble to reach the quarterfinals phase of the tournament in preparation for the forthcoming collegiate basketball season. 

Facebook and Twitter

We are actively using two social networking websites to reach out more often and even interact with and engage our readers, friends and colleagues in the various areas of interest that I tackle in my column. Please like us at www.facebook.com and follow us at www.twitter.com/ReyGamboa.

Should you wish to share any insights, write me at Link Edge, 25th Floor, 139 Corporate Center, Valero Street, Salcedo Village, 1227, Makati City. Or e-mail me at [email protected]. For a compilation of previous articles, visit www.BizlinksPhilippines.net.