State-owned tomato paste firm to be dissolved

INQUIRER.NET FILE PHOTO

MANILA  -The Department of Agriculture (DA) has initiated the process of dissolving Northern Foods Corp. (NFC) which has been incurring losses up to this day more than two years after the Duterte administration ordered its abolition.

The agency recently issued a special order that calls for the creation of the transition management committee “in the interest of service and in view of the abolition” of NFC, a government-owned and -controlled corporation (GOCC) engaged in tomato paste processing.

When asked whether or not NFC continued to incur losses, Agriculture Assistant Secretary Rex Estoperez said, “Yes, definitely.”

“If it’s not functioning as expected, then we have problems in processing tomato,” he said.

“If [NFC] is operating, we won’t be encountering problems in dumping and overproduction of tomatoes,” Estoperez added.

The committee formed by the DA will oversee the winding down activities and such other activities related to the liquidation affairs of NFC.

It will review NFC’s liquidation plan and endorse it to the Agriculture Secretary for submission to the Governance Commission for GOCCs (GCG).

The committee is tasked to coordinate with the GCG on matters related to the approval and implementation of the liquidation plan of NFC.

Also, it will perform such functions necessary to ensure the full liquidation of assets and settlement of liabilities of NFC.

The DA is acting on the NFC dissolution ordered by President Duterte through a memorandum order issued by then Executive Secretary Salvador Medialdea on Dec. 1, 2021.

It acted on the recommendation of the GCG, which found that the functions or purposes for which the NFC was created are no longer consistent with the national development policy of the state.

NFC is “not producing the desired outcomes and not cost efficient and does not generate the level of social, physical and economic returns vis-a-vis the resource inputs.”

GCG likewise found that “NFC is engaged in activities best carried out by the private sector.”

It sought the creation of a technical working group composed of GCG, the DA, the Land Bank of the Philippines, the Department of Budget and Management and the Privatization and Management Office of the Department of Finance to implement the President’s order.

The technical working group is, among others, responsible for settling NFC’s liabilities, undertaking the necessary steps to liquidate the government-owned entity’s assets and assisting in the winding-up of its corporate affairs.

NFC, located in Sarrat town in Ilocos Norte, was established in 1984 to process tomato paste and subsequently, other agri-based products to produce an alternative livelihood for Ilocano farmers, conduct agricultural research to improve production technology and enhance productivity, and carry out research on other tomato-based products.

It was a subsidiary of Livelihood Corp. (eventually renamed National Livelihood Development Corp.) until its assets and liabilities were transferred to the state-run Landbank.

NFC, as the Palace directive noted, has been incurring annual net losses except in the years 1989, 1995 and 2010.