Scrapping of NFA commercial functions sought

ECONOMIC managers are recommending the removal of the commercial functions of state-run National Food Authority, which may mean the agency may have to stop selling the so-called NFA rice.

Economic Planning Secretary Ernesto M. Pernia said that, in a meeting last week, the Cabinet secretary and the secretaries of finance, budget and management, agriculture and himself decided to propose to President Duterte the removal of the NFA’s proprietary and commercial activities.

The economic managers did not want the NFA abolished, as was proposed by some quarters.

Pernia, who is also the director-general of state planning agency National Economic and Development Authority (Neda), said he believed the President “will like” the plan to retain only NFA’s core regulatory function.

“It will not longer engage in buying and selling rice, and it will just focus on regulation and ensuring adequate buffer stock,” Pernia said.

An executive order to be issued by the President or legislation from Congress was being eyed to implement this plan.

As such, the NFA would no longer be able to intervene in the market by selling cheaper NFA rice varieties.

“Rice will mainly be imported by private sector. Imported rice is always cheaper than homegrown rice—it’s very expensive to grow rice in our country,” he said.

Also, Pernia said scrapping the NFA’s commercial function would  “remove the smuggling problem.”

“The problem with NFA is it buys high and sells low, so it really operates at a loss. The accumulated debt of NFA is already P165 billion,” he said.

To settle the NFA’s obligations, the government may have to dispose of some of the agency’s assets, Pernia said. “We’re trying to push it now because it has to be done, otherwise the bleeding will continue.”

Pernia admitted there would likely be “a lot of objections” to the plan as the agency serves as a “milking cow” for some.

“It’s a good time to [remove the NFA’s commercial function] now, because President Duterte has strong support in Congress. So many things have to be done now that he still has that political capital,” Pernia said.