Gov’t to tackle possible overhaul of NFA powers

Government economic managers are set to return to the drawing board to discuss a possible overhaul of the National Food Authority’s (NFA) powers, given the agency’s failure to achieve its goal of raising farmers’ incomes over the decades.

Economic Planning Secretary Arsenio Balisacan said the NFA’s only real achievement over the past few decades has been racking up large amounts of debt that taxpayers had to shoulder.

“We have to reposition the NFA such that it can do what it is mandated best to do,” said Balisacan, who is also director general of the National Economic and Development Authority (Neda).

He said discussions regarding the NFA would involve the participation of the secretaries of finance, budget, trade and industry, and agriculture, among others.

Balisacan said a proposal would be prepared and presented to President Aquino in the coming months.

The NFA’s main duty is to buy rice supply from farmers at high prices and sell to the public at a loss. Ideally, these steps should raise farmers’ income levels and ease price pressures on consumers.

The NFA is also mandated to ensure the steady supply of rice in the country, importing from abroad when projected consumption exceeds production levels.

A World Bank economist last week noted that the NFA’s failure to bring down rice prices has contributed to the yawning gap between the rich and the poor in the Philippines. This has been exacerbated by rampant smuggling and lack of investments in the agriculture sector, which makes production more expensive in the country.

Rogier van den Brink, World Bank Poverty Reduction and Economic Management Network lead economist, noted that Filipinos currently paid P34 for every kilo of rice. This was more than double the P16 that Vietnamese households paid for the same amount of food.

The share of food in average household income in the country today stands at 41.5 percent, or higher than in Vietnam, Indonesia, Thailand, Malaysia and China. High rice prices have contributed to wage inflation, which has reduced the country’s competitiveness in attracting investments from abroad.