Arguments for abolition of national rice agency

THE Manila Times has long advocated the abolition of the National Food Authority (NFA).

We just could not see how the dual mandate of the agency—to be tasked with aiding farmers to be paid well for the palay (unhusked rice) they produce while at the same time be required to make sure the market price of our staple is stable and affordable—can work. Protecting farmers means doing things to make their customers pay higher prices for the rice they produce.

If the NFA does a great job of making the farmers earn more, the price of rice in the market would go up—which is not helping the consuming public.

The other mandate of the NFA is to drive the price of rice down in the market place. And to keep the supply stable and prevent shortages. To be able to do this, the NFA must import and give licenses to private importers.

The second mandate gives NFA officials a lot of leeway to make corrupt deals.

Our simple solution has been to abolish the NFA.

How does the government protect the farmers then?

Do what the FairTrade Alliance and others recommend: Take the task of agricultural modernization seriously.

Do a good job of reviving the agricultural sector. That way we become self-sufficient in rice and achieve food security.

This means real extension work will have to be done by the agriculture department. Farmers must be taught, persuaded to use, modern technology.
Ways to achieve economies of scale among farmers must be introduced. Cooperatives could be the way, so government must help sponsor movements.
Farmers will have to be given or provided at subsidized prices better seeds.

The irrigation problem must be solved—and small local water impounding systems must be used instead of the large dams that we now have which are environmentally destructive.

Capital must be made available to farmers.

One of the effects of seriously reviving our agricultural sector is the increase of jobs in the countryside and the increase in disposable income of our rural population. This means a bigger contribution to the gross domestic product from the agricultural sector.

But authentic reforms in the agriculture sector will be hard as long as the rice-importation method of solving the problem of shortages is the government’s choice.

Then what about the importations to help poor people have rice to eat?

Give them cash subsidies on a conditional cash transfer basis. That makes them eager to have their children going to school.

The process of helping poor people through NFA importations, as said earlier, can be corrupted. It must not be allowed to continue.

What if there is really a need to import rice because the outbreak of food shortage is a certainty.

Give importation to the private sector—through transparent and open bidding. The winning bidders, the approved importers, would then have to pay taxes. All the procedures should be transparent.

Abolishing the NFA will, however, require a law.

Now, there are those who say that NFA need not be abolished. It should only be reformed.

Making amendments in the way the NFA works will also require legislation.

The best that can be done for the present, therefore, is for Administrator Lito Banayo to continue doing what he has begun to do which is to audit the NFA thoroughly.

The audit will guide him on what exactly to do to make the NFA avoid the ills that appear to have plagued it in the previous administration.

Something that former Budget Secretary Benjamin Diokno has fiercely advocated must be done by Banayo: Stop the “stupid” practice of letting the rice seller countries know in advance how many million metric tons of rice the NFA (including the private sector) wants to buy. This advance notice creates a sellers market.

One wonders, though, why that practice was started. Is it because there was a conscious effort to drive the price up so that there would be bigger commissions?

With the Aquino Administration’s resolve to terminate corruption of all kinds, there will surely be immediate reforms in the NFA under Administrator Banayo. –RENE Q. BAS, Manila Times