NFA should be transformed not abolished — think tank

Instead of abolishing the National Food Authority (NFA), a newly formed think tank proposed measures to transform the agency into an economically viable state firm even while fulfilling its primary mandate to help pursue food security and stabilize the price and supply of rice, especially for the benefit of poor Filipino consumers.

Forensic Law and Policy Strategies Inc. (Forensic Solutions), a private think tank headed by former Justice Secretary Alberto Agra, said the NFA can tap various methods to convert itself from a money-losing venture into a profitable agency, such as, among others, running a grains exchange market and investing its funds in financial instruments.

And in keeping with President Aquino’s personal push for public-private sector partnerships as the way to tap private funds for big-ticket public infrastructure projects, Forensic Solutions said the NFA can support the Chief Executive’s priority program by partnering with private groups in cultivate lands for farm production or even let the private sector handle rice imports.

“The abolition of the NFA is a non-responsive solution to the impending food crisis. It will not help alleviate the rice shortage, and will ultimately prove to be a disservice to the common Filipino who rely on the low-priced commodities offered by NFA,” Agra said in the latest policy paper, titled “A Grain of Hope for NFA,” which he co-authored with former State Solicitor Lally Ortilla-Mallari.

Forensic Solutions is a think tank offering services in the fields of policy, law reform, advocacy and governance. It provides forensic studies and viable legal options for their clients to best navigate executive, administrative, legislative and judicial inquiries.

Agra also served as former Solicitor General and Government Corporate Counsel. Mallari is a former legal consultant of the Philippine Stock Exchange and also once served as consultant of the Office of the Government Corporate Counsel and the Asian Development Bank.

The paper, actually the 6th produced by Forensic Solutions since its inception last month, pointed out that under its Charter, the NFA was not created as a money-making enterprise for the government, but as an agency designed to promote the growth and development of the domestic grains industry.

The NFA, which was formerly known as the National Grains Authority, was created in 1972 through Presidential Decree 4 under the framework of the 1935 Constitution. PD 4 did not specify profitability as among NFA’s primary goals as a government-owned and controlled corporation (GOCC).

It was only under the 1987 Constitution that the concept of “economic viability” was introduced as among the parameters for measuring the performance of GOCCs, Agra and Mallari noted. The late Blas Ople, who was then a commissioner of the 1986 Constitutional Commission, introduced this concept to restrain future GOCCs from escaping the responsibility of meeting the market test for viability.

“Placed in context, the NFA was not created as a money-making venture for government, but to promote the integrated growth and development of the grains industry,” Agra said. “While economic viability is ideal for a GOCC, it is not the sole criterion against which its performance is evaluated, or its continued existence determined.”

They said that as part of its mandate, the NFA can explore the following income-generating opportunities to become economically viable, these include: imposition and collection of fees on its institutional functions of regulation and licensing; investment of funds or other assets in securities, stocks, bonds and other secured collateral; establishment of a Grains Exchange; and engagement of technical services in the development, cultivation or operations of NFA’s lands devoted for the cultivation and production of rice, corn and other grains.

Agra said that under its charter, the NFA can collect fees on the registration, licensing and supervision of warehouses and mills; on the export of rice, corn and other grains and their substitutes, byproducts or end products; and on the licensing and regulation of operations of establishments related to the production, processing, transporting, marketing and trading of grains their substitutes.

“While these recommendations are feasible under the current NFA Charter, as amended, certain statutory provisions need to be clarified and amplified, and policy statements reformed, in order to clearly chart the future of NFA,” the study said.

“In addition, there is a need to re-visit the charter of the NFA to make it a more robust institution, while maintaining its socially responsive character,” it added.

For instance, they said certain regulatory functions of the NFA may be devolved to local government units, especially those that are local in scope.

The study noted that while the NFA has been given the critical tasks of ensuring food security and keeping the prices and supply of rice stable, it does not have control over farm production.

It said that the NFA, oftentimes, has no choice but to sell rice imports at a loss in the retail market in order to fulfill its primary mandate of stabilizing the prices and supply of the country’s main staple. –Daily Tribune